MOSSEL BAY NEWS - The government cannot grow the South African economy. It is up to the private sector to do it.
This is the view of Nicola (Nicky) Weimar, Nedbank's senior economist since 2000.
Nicky was the guest speaker at the Diamond Gala Event of the Mossel Bay Business Chamber on Friday, 6 September, at the Diaz Hotel and Resort.
Her experiences in the banking, securities and brokering industries have given her a broader knowledge of a wide range of fields within economics, including sector analysis, fixed investment trends and the relationship between real economic trends and developments within the financial markets.
Nicky says we all realise that the country's economy is in dire straits and that just short of a miracle is needed to help us regain our stand as an economic force in Africa, but not all is lost. According to her President Cyril Ramaphosa understands the country's predicament and he realises that job creation is one of the major keys to the growth of the economy.
What drives growth? Two factors: supply and demand. Without demand the economy cannot grow and without spending there is nothing to plough back into the supply side. The state-owned enterprises have imploded and fixed investments have grossly collapsed.
The public sector wage bill has exploded and there are not enough taxpayers in the country to foot the bill.
The government has gone overboard by borrowing money it cannot pay back and we are caught in a debt trap which is just short of 60% of our GDP (Gross Domestic Product).
One of her recommendations to put us back on the winning path is to scrap regulations and legislation. However, this will not happen in a hurry.
We are faced with shocking policies such as the mining charter, the new competition bill, intellectual policy rights and land reform that all add up to SA being a high risk country for any investment.
She predicts that Moodies will downgrade SA to universal junk status during either November 2019 or March 2020.
One factor that can play a key role in the recovery of the economy is the rand.
Up until now the rand has been totally unforecastable, but what drives the rand? Global factors such as the investors' view of emerging markets as well as their risk appetite.
"If Moodies downgrade SA to junk status, the rand will weaken at first and then normalise and we will most probably be kicked out of the international desk, but that is not all bad news.
"As part of the Frontier Index (emerging markets) we look like angels and the funds for investments will be available. We will pay higher interest rates, but the risk factor will be cut if the rand stabilises," she added.
The Business Chamber also announced the 2019 Business of the Year (in the small, medium and large categories) as well as the Business Person of the Year. The finalists in the small business category were: Cornerstone Adventures, Freaking Fast Waverider, Coffee@Work (runner up), Ello Legal and Joan's Florist (winner).
In the medium category the finalists were: Blitsdruk Mossel Bay, PSG Mossel Bay (runner up) and TyreMart (winner).
The finalists in the large business category were: Seesig Motors, Jakkalsvlei Wine Estate, Pinnacle Point Estate, Rauch Gertenbach, Afrishore Shipping (winner) and Albertinia Meubelvervoer (runner up).
The owner of Albertinia Meubelvervoer (Vanie Oosthuizen) was announced the Business Person for 2019.
The runner up was Lorette Grobbelaar (Oliver Tyres and TyreMart), with Kim Jordaan (Co-Mind), Jantjie Jonker (Jakkalsvlei) and Ronel Labuschagne (LatteRoll Coffee Shop) as finalists.
A proud moment for local businesses as they celebrate success. From left, Vanie Oosthuizen (Albertinia Meubelvervoer), Herman Visagie (Nedbank, sponsor), Paul Kruger (Business Chamber chair), André van der Westhuizen and Lorette Grobbelaar (Tyremart), Shirley Schmidt (Afrishore Shipping), Suna van Greunen and Dudley Wooldridge (Joan's Bloemiste). Photo: Michelle Reinecke
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