Nicola Mawson
I could fill this column with numbers and statistics, detailing the positive trajectory of South Africa’s economy. And it’s easy enough to do. However, the promise displayed in the numbers needs to be cemented, and that can only happen through collective action from all of us.
Everything from consumer confidence to gross domestic growth has improved. Consumer confidence is at a five-year high, business confidence is growing, with respondents in the RMB/Bureau for Economic Research index expecting conditions to improve over the next year – the first time in just more than two-and-a-half years.
Business activity, according to S&P, expanded for the first time since August 2023. The economy is growing, although the rate is tepid, to be generous.
The Merchantec CEO Confidence Index, which measures confidence levels of CEOs of listed, large private and multinational companies in South Africa, recently recorded a 7% increase in the third quarter of this year, rising to a score of 55.
A partnership between more than 140 companies and government is targeting growth of 3% by next year.
Much of this has been attributed to the new administration – the Government of National Unity. For the first time, there is real hope that things will get done and there will be a reduction in people lining their pockets.
This optimism is reflected in the local bourse, which recently hit an all-time high (All Share Index) before retracting somewhat. The rand, too, pushed higher, almost breached the R17/$ mark. There’s dollar weakness to consider when it comes to the rand, which will be largely dependent on what the Fed does, as well as what’s happening in the Middle East.
Numbers that should be going down are also dropping. Inflation seems to be at the start of a sustainable level and is expected to hover around the midpoint of where the South African Reserve Bank wants to see it.
Food inflation remains sticky though, and the escalating conflict in the Middle East could not only adversely affect that, but also the price of oil – which means less benefit for South Africans at the pumps.
Here’s my concern through. Is all of this too little, too late?
A friend of mine was recently retrenched. Very recently. During the period when everything was getting better. Someone else I know, who works in steel manufacturing, hasn’t seen work coming in for an absolute age.
Jobs are still being shed. And, given the stories of people being retrenched – although anecdotal – they will continue to be lost. The unemployment rate, based on Statistics South Africa’s latest print, moved up to 33.5% in the second quarter – the highest in two years and surprising analysts who expected it to slow to 32.3%.
It would be interesting to see the third quarter figures as the new dispensation would not have had any effect on the second quarter.
TreasuryONE, as recently as Wednesday, said there were investor concerns about “lofty” growth projections being fulfilled. Deindustrialisation and a lack of fixed investment are also red flags, it said.
The rand is weakening, the JSE All Share Index is declining as I write this.
This is worrying. I almost get the feeling that it seems as if South Africans – who are full of gees and stood side-by-side as the Springboks slaughtered the opposition to not only bring the World Cup home but also the Freedom Cup and Rugby Championship – have been holding on for so long that the growth has come too late.
Don’t get me wrong. South Africans are an amazing bunch and pull together when times are tough. We support each other when we start side gigs, such as someone offering prepared meals to make extra money.
The miracle we have all been hoping for may actually be fulfilled. But the optimism is coming at a time when many have already reached a brick wall.
The way forward, as I see it, is to keep pulling together – every single stakeholder – as well as holding those in charge of running SA Inc. accountable for their actions. We need to ask the tough questions, and not be put off by vague answers.
Together, we can do this.
Nicola Mawson is a freelance PR strategist, content creator, and financial journalist.
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