MOSSEL BAY NEWS - Economist Dawie Roodt from the Efficient Group, addressed members of the Mossel Bay Business Chamber on Friday, 25 February.

His topic was the budget speech by Minister of Finance, Enoch Godongwana.

In his presentation, titled Like a cat on a hot tin roof, he said Godongwana did not have confidence in the country's economy.

Roodt identified the greatest limit to spending as being the country's large amount of debt. He said he believed the ANC was the most destructive force in South Africa and was the main cause of South Africans' perception that the government is corrupt, the country politically unstable and state spending out of hand.

"The economy is balancing on a knife edge and it is clear from the minister's budget speech that there is no space for movement, should the plans and projections not pan out."

As far as local wealth goes, Roodt said that 25 to 30 years ago, the average South African was 4.5 times wealthier than the average Chinese. Currently, the average South African earns half the income of the average Chinese.

Concerns

Roodt expressed his surprise at Godongwana not increasing the fuel levy in the presented budget, which is a first since 1993. He said the other unexpected announcement that the road accident fund would not increase, would only delay a sharp increase at a later stage.

What made the audience gasp was when Roodt mentioned that fewer than 1 000 South African companies paid 63% of all company taxes. He also pointed out that the second biggest budget expense besides education at 23%, social protection, was a concern. This refers to the Covid-19 relief grant, which by all indications may remain as a basic income grant.

"When you look at this, it means 30 million South Africans are paid a state income. Forty million South Africans have jobs, and two million of these are civil servants. Hence, in fact 32 million are paid by the state."

He expressed his concern that wealth tax may soon become a reality in South Africa.

Trends

Despite a bleak picture, Roodt said there is plenty of opportunity in South Africa. He mentioned the massive privatisation drive in the country since the 1980s, referring to the post office, South African Airways and the railroad.

"It is easy to take advantage of an opportunity. Identify something the state is supposed to be doing, but not doing and then do that. Make sure you are physically safe, have the necessary skills, a good connection and you can work from anywhere in the world."

In terms of international trends, Roodt believes the emergence of artificial intelligence and the growth of the e-economy will continue to have an impact on retail. He also predicts that the existence of digital money will eventually cause the disappearance of banks, as we know them.

Roodt described South Africa as "a sea of poverty with islands of prosperity" and said that it was important to be on those islands.

"Just make sure you position yourself correctly."

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