By Bruce Berry, CEO of TMA-SA
Well, here we are at the end of winter already. Will it be remembered as South Africa’s “Winter of Discontent”? In purely economic terms, the hard lockdown in 2020 was probably worse as the overall GDP growth in 2020 was -7,0%. The forecast for 2021 is 4,0% with that for Quarter 1 coming in at 1,1%. However, the fallout from last month’s rioting and looting has further negatively affected growth prospects which means the overall recovery will probably take longer. Business confidence had ticked up 50 index points in Quarter 1 although Consumer confidence fell further into negative territory. Looking towards what the stats for Quarter 2 and Quarter 3 will reveal…
The good news is that global commodity prices have been increasing on the back of improved global demand. As a commodity-exporting country, South Africa will continue to benefit from this. The Covid-19 vaccination roll-out has picked up and is now available to all those over 18 years old. Although there is already talk of the 4th wave of infections peaking around Christmas, it is anticipated that the number of people vaccinated will temper the impact and so negate the need for any further hard (or partial) lockdowns.
Changes following the Cabinet reshuffle earlier this month saw President Ramaphosa appointing Enoch Godongwana as the new Minister of Finance. Godongwana was previously head of the ANC’s Economic Transformation Committee and is influential on the National Executive Committee. His appointment was generally viewed as positive, as he is well known in financial markets for his market-friendly approach to economic reform. However, the overall feeling was that the Cabinet changes would have little impact on the effectiveness of operations within the Government.
The Green Paper on Comprehensive Social Security and Retirement Reform was released in August. It outlines Government’s proposal to establish a National Social Security Fund. In terms of the proposals, South Africans may be required to contribute up to 12% of their earnings towards the government-managed fund. Other proposals in the Green Paper include a universal basic income grant to replace the current means-based one. The Green Paper also includes proposals on the regulatory reform of the pensions and life insurance industry, extending UIF benefits and replacing the Road Accident Benefit Scheme. Comments are invited on these proposals and should be submitted to the Department of Social Development by 10 December 2021. The Green Paper can be viewed at https://businesstech.co.za/news/wp-content/uploads/2021/08/Green-Paper.pdf.
Members who have not yet paid their subscription fees for 2021 are urged to do so as soon as possible. Members whose subs are still in arrears at the end of the month will have their membership cancelled and will not be eligible to re-apply for 12 months.
Looking forward to spring and some warmer weather!