POSITIVES EVEN AS RATINGS AGENCIES DOWNGRADE SA
At the World Economic Forum (WEF) held in Cape Town earlier this month, there was no hiding the state of the South African economy. Government spin excusing the horrible figures and bleak outlook was swallowed whole by few of the jaded economists present.
Peter Attard Montalto, economist at Nomura, described the three main lines of rhetoric with regard to the country’s growth as “a little irritating”.
According to Montalto, cabinet ministers tended to infer that the country should be very happy with these levels “given the energy crisis is to blame”; the growth percentages were coming off a higher base than the rest of Africa; and the country was still battling with the legacy of apartheid.
The sense was that the government was happy to “sit it out” and wait for growth to resume from 2020 onwards. Montalto said Nomura didn’t find this positive at all, and that the apartheid comments − which “seemed much more widespread among policy makers than ever before” − would not wash with investors.
With the right policy choices – and a reliable power supply − Nomura estimated that growth to be at 5% to 6%.
A report released at the Forum SA noted that South Africa had fallen in global competitiveness rankings because of weak education system and l abour market uncertainties, according to the World Economic Forum in Cape Town.
The report compiled by the WEF in conjunction with the International Bank for Reconstruction and Development (IBRD), the African Development Bank (AfDB) and the Organisation for Ec o n o mi c Co - o p e r a t i o n an d Development (OECD) said Mauritius had streaked past SA as having the most competitive economy in Africa.