Are South African Leaders Waking Up to the 2016 Economy?

Mar 07, 2016
Author: Ean Barnard

The visionaries of South Africa have begun to see.

The 2016 economy of South Africa has had a rocky start. But eyes are opening to the reality we face. It’s time that South African leaders stop playing ping pong with our economy, and it’s starting to sink in.

South African Business and Government had a meeting before the president’s State of the Nation Address to discuss the future of the South African economy. Politicians are recognizing the need for unity between the private sector and the government.

The current economic crisis in South Africa doesn’t bode well for the country’s future. However, the Minister of Finance – Pravin Gordhan –  may have a positive impact when he delivers the Government Budget on 24 February.

The government has made it clear that they want to meet with business leaders again after Mr. Gordhan’s budget speech next week.

Business leaders in South Africa have voiced their concern and it seems that Government has taken heed to their word. Leadership from Old Mutual and Nedbank compiled a presentation to inform government on how to avoid South Africa’s creditworthiness being lowered to a junk status.

President Zuma still denies the plummet of the Rand during December 2015 as his own doing. But on a positive note he has accepted to pay back the money spent on his Nkandla compound. It seems as if the South African government at large is straightening its act.

Does this mean salvation from economic doom?

The 2016 economy of South Africa will have a low percentage of growth compared to previous years. Some economists predict GDP growth lower than 1%. With the way the inflation rate is rising – and top that with a food shortage that may hamper the South African market – it will naturally take time for the South African economy to recuperate to it’s former glory. What may help in the meantime is a weaker rand that will boost all the exports from South Africa. The mining industry has some breathing space and may use this time to build a resilience against what may come through the course of this year.

South Africa is not home free yet, but our leaders have at least recognized the state of our nation. The proof, however, is in the eating of the pudding. Will our leaders’ actions meet their words? Time will tell. Unfortunately, in this instance, hindsight is the perfect sight. All will be revealed in time to come.

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