South Africa Trade Surplus Surges to 11.4 Billion Rand in March

JOHANNESBURG (Capital Markets in Africa) – South Africa’s trade surplus more than doubled in March as the exports of mining produce surged.

The 11.4 billion-rand ($860 million) surplus compares with February’s revised 4.8 billion-rand surplus, the Pretoria-based South African Revenue Service said in an emailed statement Friday. The median of six economist estimates compiled by Bloomberg was for a surplus of 6.2 billion rand.

Relief on the trade balance eases pressure on the current account, the broadest measure of trade in goods and services, and may boost the rand. The shortfall on the current account narrowed to the smallest in almost six years in the fourth quarter of last year, even as the central bank said it’s unlikely to remain at these levels. For the year through March, the trade surplus was 5 billion rand compared with a 24 billion-rand deficit in the same period in 2016.

“The improvement in the trade position, relative to last year, reflects the effects of relatively weak consumption and investment activity, which have contributed to suppressing import growth,” Kamilla Kaplan, an economist at Investec Ltd. in Johannesburg, said in an emailed response to questions before the release of the data. “A further strengthening in global trade momentum would support South Africa’s export growth prospects whilst domestic economic activity is expected to recover only modestly this year, which should continue to restrict import growth.”

The rand has weakened 4 percent against the dollar since President Jacob Zuma recalled former Finance Minister Pravin Gordhan from investor meetings in the U.K. on March 27. Zuma replaced Gordhan with Malusi Gigaba in a March 31 cabinet reshuffle.

Exports of mineral products, which include iron ore and coal, increased by 8 percent, or 1.7 billion rand, and shipments of precious metals and stones, which include gold and diamonds, rose by 33 percent, or 4.2 billion rand, the Revenue Service said. Imports of textiles decreased by 18 percent or 640 million rand, and inward shipments of vehicles and transport equipment rose by 41 percent or 2.9 billion rand.

The rand strengthened 0.7 percent to 13.2667 per dollar by 2:19 p.m. in Johannesburg on Friday. The yield on rand-denominated government bonds due December 2026 fell seven basis points to 8.67 percent.

The monthly trade figures are often volatile, reflecting the timing of shipments of commodities such as oil and diamonds.