Sanlam: policy uncertainty damaging

Government must provide policy certainty and tackle its problems one at a time if it is to pull the country out of its economic malaise, according to Sanlam CEO Ian Kirk.

SA’s economy tipped into its first recession in nine years in the second quarter as President Cyril Ramaphosa tries to restore confidence battered by misrule by his predecessor.

It also comes as the ANC pushes changes to the constitution to make it easier to seize land without compensation and uncertainty lingers over mining rules that have hindered investment.

“When you’re in the situation that we’re in, you have to have a single-minded purpose,” Kirk said. “Anything – any policy uncertainty – that causes a negative on investment flows, investor confidence, consumer confidence is just something for another day.”

The ANC’s talk of land reform has drawn criticism from the main opposition party, agricultural lobby groups and even trade union federation Cosatu.

While it was important to address inequalities in the distribution of land, the state had to prioritise inclusive growth and job creation first by cementing policy certainty, Kirk said.

Ramaphosa’s administration should work with the private sector to regenerate investment, he said.

The “Ramaphoria” that buoyed the markets and the public at large after Ramaphosa engineered Jacob Zuma’s ouster as president in February has long since faded, with the rand weakening amid souring sentiment toward emerging markets.

The rand has declined 19% against the dollar this year, the third-worst performer of 31 major and emerging market currencies tracked by Bloomberg.

“It will take some time for improved business and consumer sentiment in South Africa to translate into accelerated economic growth,” Sanlam stated on Thursday, when announcing its first-half earnings. – Bloomberg

Anything – any policy uncertainty – that causes a negative on investment flows, investor confidence, consumer confidence is just something for another day.

Ian Kirk Sanlam CEO