Potential silver linings for SA in cloud of war over Middle East

The Israel-US war on Iran has opened several unexpected economic and business opportunities for South Africa, and some could endure even if the ­conflict ends soon.

This list – by no means exhaustive – includes increased shipping traffic through SA ports, a boost to tourism, an opportunity to position SA as an attractive financial centre alternative to an unstable Middle East, and a boost to commodity exports such as coal because of the disruption to gas supplies for Asia.

SA’s economy is hardly going to escape the economic shrapnel thrown up by this conflict. Motorists will feel the pain on Wednesday, 1 April 2026 when retail fuel prices soar, and hopes for lower interest rates over the next few months have been obliterated. And the economic damage wrought will worsen as long as it lasts.

But there are silver economic linings for SA’s fragile and slow-growth eco­nomy, which needs to grasp any low-­hanging fruit that swings its way.

The stable option

“We have a window to position ourselves as a stable alternative in an unstable region,” notes Business Leadership SA Chief Executive Busisiwe Mavuso. “Dubai and Qatar have built themselves as financial and business hubs, but right now, expatriate workers and their families are evacuating, and firms are scrambling to relocate staff.

“We share their time zone. We have the infrastructure. Cape Town and Johannesburg must move aggressively to attract that displaced talent and those operations.

“The global conference and events­ industry is in the same position – it needs destinations unaffected by air travel disruptions and security concerns. We can be that ­destination, but only if we act decisively,” Mavuso says.

SA has sophisticated and liquid financial markets – the rand is a heavily traded emerging market currency – adding to the country’s competitive edge in this space.

And SA can build on its reputation as a conference host, which is enhanced by its southern hemisphere seasonal offerings. There is a reason why the Mining Indaba is held in Cape Town every February; mining executives, bankers and analysts up north want to flee from the chill of London and Vancouver at that time of year.

Digital nomads and tourists

There is also the prospect of luring digital nomads to SA, and the capital they bring and spend. In the latest ratings compiled by the VisaGuide Digital Nomad Index, Dubai ranked second place as a destination for digital nomads, topped only by Spain.

SA is not even in the top 10 and the initial uptake of “remote work visas” – permits for digital nomads – last year was disappointing. The Department of Home Affairs had not responded to requests for an update by the time we published.

But with expats fleeing places such as Dubai, it is an area where SA can surely step up to the plate to market itself.

There is also the potential to welcome more tourists who might otherwise have chosen the Middle East as a holiday destination. An initiative to get the measure of this is being launched in Limpopo by Waterberg Tourism, which is conducting a survey of industry stakeholders in the region.

The survey’s preamble says it aims “to understand whether the current geopolitical tensions in the Middle East have had any measurable impact on travel demand, booking patterns and guest behaviour in the Waterberg region”.

Questions asked include: “Have you experienced any booking changes that you can reasonably attribute to the current Iran/Israel-US conflict?” and whether “guests explicitly mentioned the conflict as a reason for changing their travel plans”. Other questions ask about the impact of the conflict on an operator’s business.

The initiative underscores how the conflict has quickly propelled itself onto the radar screen of the local tourism industry, which clearly sees a path for growth in a sector that is labour intensive, brings in foreign currency and creates opportunities for small businesses and entrepreneurs.

“We are targeting product owners and management and tourism facilitators such as tour operators and travel agents in the region,” said Engeline Gericke, head of the Waterberg Tourism Bela-Bela Hub.

SA tourist numbers from overseas countries have been on the rebound since the pandemic, but they remain below pre-Covid levels, according to data compiled by Statistics SA.

“A year-on-year comparison between 2024 and 2025 for quarter four (Q4) shows that the number of overseas tourists increased 15.4% from 624,073 in Q4 of 2024 to 719,907 in quarter four of 2025,” it says.

The conflict in the Middle East and the security concerns that will hang over the region long after it is over present a way to build on this momentum.

Ships in port

The tides triggered by this conflict are also bringing more ships around SA’s shores and into its ports, which are recovering under new leadership at Transnet after years of mismanagement and underinvestment. Handling times at Durban, for example, have fallen to two days from an appalling 21 days.

Carriers have been avoiding the region, including the Suez Canal, since 2023 in the wake of Houthi attacks on ships passing through the Red Sea, opting instead to make the long marine trek around the Cape. Such traffic began trickling back, but the closure of the Strait of Hormuz and the instability in the region – a major concern for insurers –have prompted a shift.

“Rerouting south of the Cape began in 2023 and there was a movement towards resuming Suez Canal transits – Maersk announced a couple of its many container vessel services usually transiting the canal to resume transits back around Christmas or New Year – but the latest developments in the region have halted these efforts, so these services are also back to sailing south of the Cape for now,” said Mikkel Linnet, head of global media relations at the shipping giant.

Reuters reported on Monday, 23 March, that other major container carriers including Hapag-Lloyd and CMA CGM have said they are also rerouting vessels around the Cape of Good Hope. “The Cape Chamber of Commerce and Industry said diversions rose 112% as of early March, signalling what carriers now see as a lasting change in operations,” Reuters said.

Boon for coal

There are also the exports that SA ships out. Iranian attacks have destroyed a fifth of Qatar’s liquefied natural gas (LNG) export capacity for up to five years – a state of affairs that has triggered an Asian pivot to coal to fill the gap.

“If the war ends tomorrow, then the LNG situation will take long to recover. There won’t be an overnight solution for Qatar,” said Mike Teke, chief executive of South African coal producer Seriti Resources and chairperson of global industry group FutureCoal.

“What we are seeing in the East, Pakistan, China and the like is that they are ramping up and switching quickly to coal. Those that have coal-fired capacity that has not been used will quickly revert back to that, including in Europe... and we will take advantage of these opportunities as SA coal producers.”

Coal prices have risen significantly since the start of the conflict as a result of such trends. Most of SA’s coal exports are destined for Asia, and the Richards Bay Coal Terminal has wind in its sails for more capacity, thanks in large part to Transnet’s rebound. It exported 57.66 million tonnes of coal last year, an increase of more than 10% on the previous year, and is targeting more than 60 million tonnes this year. And the events in the Middle East mean there will be demand for all that the terminal can handle.

The cloud over this silver lining is the role in climate change played by the use of coal, for which demand reached record levels last year for the third year on the trot.

But SA is a developing economy with sky-high rates of unemployment and poverty, and abundant coal reserves. The trade-off is jobs created or maintained locally and the foreign currency earnings that exports generate. And if Asian economies cannot source coal from SA, there are alternatives.

This new chapter in the remarkable comeback of coal, which was widely forecast a few years ago to be in terminal decline by this point in time, has been reflected in the rising share prices of SA producers of the fossil fuel, such as Exxaro and Thungela.

Sasol’s share price has also taken off, soaring almost 50% in the first three weeks of the conflict. Its performance from here will largely hinge on the oil price. But the wider point is that some SA investors, including pension and asset managers such as the Public Investment Corporation, have seen parts of their portfolio rise in ­value because of the conflict.

War has winners and losers beyond the battlefield and, on the wider stage, the SA economy will be a loser. But the country has some wins that it can grasp from this conflict. DM

This story first appeared in our weekly DM168 newspaper, available countrywide for R35.