The calculations referred to relate to the potential financial and macroeconomic impact of the market response following the comments by US Ambassador R E Brigety on 11 May 2023. The National Treasury conducted a preliminary analysis of the possible macro-fiscal impact of South Africa’s geopolitical tensions related to SA-US relations, focusing primarily on the impact on the current fiscal framework. The analysis considered that there was a significant depreciation in the rand against the US dollar in May 2023, in part due to the pronouncements of the US Ambassador to South Africa regarding the Lady R vessel. The analysis considered the possible negative consequences of this on key macroeconomic variables including higher inflation rates, borrowing costs and, subsequently, bond yields – all of which weaken the fiscal position. A protracted materialization of the events assessed in this analysis will require the Minister and the National Treasury to consider possible measures in mitigation. An analysis of a potential loss of benefits under AGOA and/or the risk of secondary sanctions is being considered; however, given this work’s nature and required detail, this is expected to take some time.