KLCBT Business Breakfast with Dr. Roelof Botha - 29th May 2019

Stabilis hosted a business breakfast at Emnotweni Sun together with the Kellaprince Properties Group and Sable International as co-sponsors. The theme of the presentation was a "post-budget; post-election" on the country's economic growth prospects over the short to medium term.

In summary, Dr. Roelof Botha touched on the following highlighted below:

Mr Cyril Ramaphosa's ascension to the presidency of the country has fostered a new-found spirit of optimism, as initially reflected in a stronger currency, higher values for our sovereign bonds, a more sensible approach towards energy policy and the retention of investment grade status for public debt by Moody's.

Once the lingering uncertainty over radical land reform has been removed (hopefully in favour of retaining the principle of private property rights) and the elections are over, South Africa's new President can begin the daunting task of securing higher growth and employment creation in earnest.

As a previous winner of the Finmedia Economist of the Year Award and with more than 40 years of experience, Dr Roelof Botha is exceptionally well-qualified to advise executives and managers on prospects for higher economic growth in the 2^nd half of 2019, which could pave the way for stellar economic expansion in 2020. The discussion will include the following topical issues:

• The impact of the 2019 SONA & National Budget
• An index of the financial resilience of households
• The likely post-election political landscape
• Structural improvement in growth prospects for SADC
• Quantifying the "Ramaphosa-effect"

Some "take-outs" from Dr. Botha's presentation were the following:

1. The Monetary Policy Committee's (MPC) obsession with inflation targeting is adversely impacting economic growth and by implication job creation.
2. The result is that South Africa has a relatively high cost of capital and costs of servicing debt are also relatively high.
3. Unemployment in South Africa now sits at almost 9 million people, a statistic for massive socio-economic consequences.
4. Moody's has given the country some reprieve by not updating its investment grade rating at the end of the first quarter of this year.
5. It is imperative that all SOEs (State Owned Entities) receive the requisite attention to turn around their finances. (Moody's will be observing!)
6. If all goes according to plan, and Mr Ramaphosa makes the changes he said he will make, economic growth of almost 3% by the end of next year is not impossible.

Aurthor: Derek Todd - Kellaprince

Photos Courtesy of: Arisa Janse van Rensburg - Lowvelder