Peer­ing into the crys­tal ball

Finweek English Edition - - UNITTRUSTS -

FAMED 19th Cen­tury Amer­i­can wit, author and so­cial com­men­ta­tor Mark Twain once re­marked that “pre­dic­tion is dif­fi­cult – es­pe­cially of the fu­ture”. Look­ing ahead to 2011 is no dif­fer­ent, ex­cept that with tec­tonic shifts in the global fi­nan­cial land­scape one thing is clear: change is in­evitable. Where the chal­lenges and op­por­tu­ni­ties lie for 2011 and be­yond were de­lib­er­ated at a re­cent GIBS Fore­sight 2011 Fo­rum.

Dr Lyal White, di­rec­tor of the Cen­tre for Dy­namic Mar­kets at GIBS and one of seven high-level pan­el­lists on the night, says 2011 will be the start of the “dy­namic mar­ket decade”. White ex­plains that while ma­ture mar­kets are ex­pected to grow in 2011 “by maybe 1,7% at best”, dy­namic mar­kets “will grow at an av­er­age of about 6,5%, a level they’ll re­tain and prob­a­bly in­crease to about 7% by 2020”.

This emer­gence is driven by the fact that the world’s biggest economies – North Amer­ica and Western Europe – are still bat­tling with the fact that this is no or­di­nary re­ces­sion, says Dr Adrian Sav­ille, chief in­vest­ment of­fi­cer of Can­non As­set Man­agers. Cer­tainly while these eco­nomic giants con­tinue to stut­ter there will be head­winds for South Africa, but we find our­selves en­sconced in the third-fastest grow­ing re­gion in the world; in fact sub-Sa­ha­ran Africa is grow­ing al­most as fast as In­dia and per capita in­comes in sub-Sa­ha­ran Africa are higher than In­dia’s, says Sav­ille.

MTN Group CEO Phuthuma Nh­leko agrees that these global fi­nan­cial shifts “are of such a na­ture that for us in Africa and in this coun­try they present an enor­mous op­por­tu­nity. For me, Africa is the best kept open se­cret from an in­vest­ment and a re­turn per­spec­tive, cer­tainly in our sec­tor where we’ve en­joyed 30%-40% growth in sub­scribers and rev­enue per an­num, while the likes of France Telekom and Voda­fone have been flat. It’s not rocket sci­ence that that huge pool of money has to find an op­por­tu­nity some­where … so you come back to Africa, In­dia, China, Brazil.”

In the­ory the prospects are there, but Nh­leko stresses that Africa con­tin­ues to be held back by neg­a­tive per­cep­tions; and while the al­lure of growth is help­ing to dis­pel these views at a busi­ness level, the key to ban­ish­ing Afro-pes­simism still rests in the po­lit­i­cal sphere. On this point Nh­leko is clear: “ We can have all the poli­cies we want, but with­out in­fra­struc­ture devel­op­ment on this con­ti­nent we will not see the full GDP growth we re­quire.” Poli­cies mean noth­ing with­out the ca­pac­ity to ex­e­cute them, he says.

South Africa, though, has im­pres­sive strate­gies in place which Sav­ille be­lieves bode well for our fu­ture: “We have a fan­tas­tic govern­ment bal­ance sheet; very dis­ci­plined fis­cal pol­icy; and level-headed mon­e­tary pol­icy which, in part, ex­plains the low, sta­ble in­fla­tion rates and the muted in­ter­est rate en­vi­ron­ment.”

In par­tic­u­lar, South Africa’s “New Eco­nomic Growth Path” is ex­pected to have an im­pact in 2011. For­mer politician Roelf Meyer, ex­ec­u­tive di­rec­tor of Fev­erTree Con­sult­ing, is op­ti­mistic about the op­por­tu­nity for en­gage­ment on the pro­posal ahead of Min­is­ter in the Pres­i­dency Trevor Manuel’s first re­port on the work of the Na­tional Plan­ning Com­mis­sion in Septem­ber 2011. While the plan’s pre­de­ces­sor, GEAR, was tainted at in­cep­tion in 1996 due to a lack of in­put across sec­tors, Meyer says: “We can be very proud of what we have in place in terms of eco­nomic rules and poli­cies, but ob­vi­ously GEAR doesn’t de­liver all the re­quired re­sults in terms of job cre­ation, al­le­vi­at­ing poverty, etc. What is now com­ing for­ward is a new at­tempt to ad­dress those se­ri­ous prob­lems … and maybe that is what we should take pos­i­tively into the next year.”

Newspapers in English

Newspapers from South Africa

© PressReader. All rights reserved.