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It's meant to be used by people temporarily in another country. Obviously if you remain in South Africa indefinitely pick up a local payment method (or buy wallet cards).
"Your country is part of your Steam account settings. Your country setting affects what you see on the Steam store, the currency you see prices in, and the currency of your wallet. If you have moved to a new country, or are living abroad for an extended period of time, you can update your Steam country setting.
Steam only accepts payment methods from the country that matches your Steam country setting. If you frequently move between countries, choose the country that is your primary residence, where you have a payment method."
Set it to Australia. You've presumably got an Australian address still linked to your existing payment methods.
Talk to Paypal. Steam support can't magically force it.
If you can convince PayPal to support your local currency it'll be available as a payment option again.
Talk to Paypal.
And your Steam is not. This is the confusion you have.
Talk to Paypal and tell them to support South African Rand.
As cSg|mc-Hotsauce has said you re in South Africa, Steam wants South African Rands from you not US dollars, PayPal doesn't support it so you can't use PayPal.