Cube Workspace’s recent webinar was such a pleasure to be a part of – I had the opportunity to be the facilitator of the event with someone quite noteworthy as the guest speaker and presenter.
Before I mention who, allow me to set the stage somewhat, South Africa is struggling. We were struggling before the Covid-19 pandemic and, now after conquering the 2nd wave of infections, we face the practical barriers of a successful and efficient vaccine roll out and more Covid-19 ‘waves’ – we are still struggling as a country. So this, coupled with all the other headwinds we face, it is surely quite normal to ask, is there any hope? Well, the title of the session was “Is 2021 the start of South Africa’s comeback?” implying hope and elaborating on some of the reasons to be expectant about South Africa – I would encourage you to view the full recording here.
Something we didn’t talk about that I think is very relevant to a story of hope for South Africa’s future is you, the business owner, the SME and we shouldn’t forget the vital role we play in the economy. You have a job to do, salaries to pay and dream to chase and a business to build.
Now to our speaker, this Gentleman has spent decades in finance and being the Chief Economist for the Old Mutual Investment Group, he is none other than Mr. Johann Els who makes a compelling argument for optimism.
His optimism could be summarized in the following points
- A strong global economic rebound & a Strong SA growth rebound in 2021
- A South African Rand that is strong and more stable
- Low inflation
- Low interest rates
- Better medium term growth prospects and a possible fiscal turning point
State Owned Enterprises and Municipalities may be in a state of disrepair but we can be proud of our central bank, independent judiciary and competent Treasury. Furthermore, we have a strong financial sector, deep and liquid capital markets, foreign exchange freedom and a highly traded currency.
The Central Bank of a Country has a major role to play economically so it would be pertinent for me to share a little bit about ours. We have an excellent Reserve Bank which has proven its strong independence in the face of political pressure and which boasts great leadership. A name to commit to memory is Lesetja Kganyago, he is our award-winning Governor of the South African Reserve Bank (SARB). He has won the World’s Central Banking Governor of the Year Award and another accolade is that he has in the past, served as the Chairperson of the International Monetary and Financial Committee, which is the primary advisory board to the International Monetary Fund (IMF) Board of Governors.
There are still many risks of course, Economically specifically, it would most likely be our mounting debt and the risk is will the Country be able to manage this properly.
I’d prefer not to comment on the political environment other than to say, we have enough plans, we need implementation, not grandstanding…
I suppose hope and frustration lies in the fact that South Africa has so much potential but it seems to be wasted, almost continuously. Confidence and sentiment can change very quickly and I wonder how that could shape our future…
What has been very interesting for me to see the spectacular rebound of the stock markets and that, now more than a year after the initial lockdown, as businesses are reporting their financials, most of the businesses listed on the JSE are reporting numbers Better than expected. This for me speaks to something called, Resilience and I believe, a proxy for the resilience of South Africans and, of you. We as South African business people are, if nothing else, resilient. So as you face the uncertainty of doing business in your environment, think of resilience as it will be a necessary and powerful weapon in your arsenal.
In closing, I would encourage you to focus on what you can control and look for the opportunities in your space, because you are the hope of this country and the opportunities are there. Albert Einstein once said: “in the midst of every crisis lies great opportunity”. Now, I challenge you, resilient businessperson, Be An Optimist.
James is the director of Villic Wealth an independent financial advisory and wealth management business based on the principle of stewardship and operating out of Cube Workspace Morningside.
This is for general information purposes only and is not financial advice.
Please be on the lookout for the next Cube Workspace event.
