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Unchanged interest rates a catalyst for sustainable economic activity

Against the backdrop of easing lockdown restrictions and a reassuring National Budget, the South African Reserve Bank’s (SARB) decision to keep the repo rate unchanged provides further impetus for more sustainable economic activity.

Optimistic budget masks a number of key risks

Finance Minister Tito Mboweni’s budget has been received very positively, as demonstrated by the reaction from markets. SA Inc companies have rallied, the rand initially strengthened, and even the bond market is acting positively. However, while there are notes of hope, this budget also demonstrates a number of key risks, overly optimistic assumptions and potential weaknesses, pointing to an extremely challenging path ahead for the country.

State of the Nation Address by President Cyril Ramaphosa 2021

President Ramaphosa delivered the Nation Address on Thursday evening as the country struggles with an ailing economy and the impact of the corona virus.

The good news … and the bad news

The GDP numbers are much better than expected. In fact, the 66% quarter-on-quarter, seasonally adjusted, annualised figure is better than even the best industry expectation. It has definitely been a positive surprise which has been well received by the market as we can see from the positive movements in the rand exchange rates as well as the bond market.

Leadership in a time of COVID-19

Much has been written about the uniqueness of 2020 and all the changes and uncertainties that have come with it. What started as a localised and isolated health scare, very soon spread to a global pandemic. Despite fatality numbers being relatively modest as pandemics go, the uncertainty about the disease, and its transmission and propagation, caused an extreme leadership response.

Ramaphosa’s Recovery Plan – the good, the bad, the indifferent and...

The best was left for last. If what is promised in the end really happens, we will have a real prospect of desperately needed prosperity and jobs. If we really get reductions in spending and debt, market barriers down by 50%, a seriously reprioritised Budget, release of superfluous air waves spectrum, unbundling of Eskom, private power generation and the like, we will be a freer economy. Freer economies – as measured by the Economic Freedom of the World Index – always and everywhere prosper.

Shocking GDP contraction – has the economy been irrevocably damaged?

On Tuesday Stats SA announced that SA’s GDP had contracted 51% between April and June (using annualised quarter on quarter numbers – in other words, this is a 17% decrease for the quarter) as a result of the lockdown imposed in response to Covid-19. The contraction was shocking – but not unexpected. Given that government took the decision to implement one of the harshest and longest lockdowns globally, the severity of the economic contraction should not come as a surprise.  

How business travel will help kickstart economic recovery

Business travel will have an important role to play as the global economy recovers from the massive knock-on effect of COVID-19. The US and the Eurozone experienced record-breaking declines of 32.9% and 40% in GDP, respectively, in the second quarter. And, although the extent of South Africa’s economic downturn has yet to be established with the official GDP figures only being released in a few weeks, we know the impact in our country has been severe.

‘Flattening the curve’ was intended for the virus, not the economy

Business for SA (B4SA) has called for South Africa to proceed quickly to lockdown level 2, lest deeper, and longer-lasting harm be caused to an already crippled economy.

Gradual lifting of lockdown – impact on agriculture

The phased or risk-adjusted approach to lift the current national lockdown is welcome news for the agricultural sector, especially those industries mostly affected by the Covid-19 lockdown.


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