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TMA-SA CEO Insights February 2021

Well, hard as it is to believe, here we are at the end of February already. Memories of the Festive Season now fading as we get back into the swing of things.

The good news is that our Covid-19 infections have fallen dramatically, and new infections are now below 1000 per day. The arrival of the first batch of vaccines in the country means the roll-out can now commence and in his last “family chat” President Ramaphosa said more doses will be arriving soon. All this will hopefully mitigate against a potential “Third Wave” as life slowly starts to return to some sense of normality. However, with the return to school, more freedom to congregate and socialise, increased travel etc. we still must continue to be sensible to prevent any further lockdowns. Economic activity is expected to rebound this year by around 3,3% as a result of increased household consumption and the export of commodities.

The bad news is we are going to be living with the consequences of the pandemic for a long time. The ‘official’ unemployment rate is now the highest on record at over 30% and, according to the DA, every child born in SA is already R67,000 in debt as our national debt approaches R4 trillion (or just over 75% of GDP with the budget deficit now 14% of GDP). While we were spared a major tax increase, this explains the increase in government spending and structural reforms which Minister Mboweni announced in his recent budget speech. But the government, as he alluded to, can only do so much …

The question is what does all this mean for us – those at the coal-face who have to deal with the reality of current socio-economic conditions daily?

The maintenance and preservation of corporate value remain intrinsic to ensure economic growth and the general well-being of the country. Turnarounds and business rescues do have a role to play and do make a meaningful contribution. And that is thanks to the work being done by our members. It imperative that our members are well equipped and have a good understanding of the environment in which they operate. TMA-SA will continue to strive to ensure members have access to the latest legal updates and court rulings, that our Practice Notes are relevant and insightful, and that the networks and relationships which we help to foster are beneficial. Our “kickstart” for 2021, with the theme Onwards and Upwards, is next month so we look forward to your participation. Any other comments or suggestions which you might have should be sent to Exco so we can act accordingly.

While it will undoubtedly be another tough year, there are opportunities for growth that we are well placed to take advantage of as the long-standing economic challenges remain. Now is not the time to despair but rather, as Minister Mboweni reminded us by quoting Archbishop Desmond Tutu, to see the light despite the darkness. I urge you all to rise to the challenge.

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