EDITOR’S NOTE: What is left to be positive about in SA?
CAPE TOWN – Following months of extremely negative publicity about South Africa, across all fronts, especially political, I ask myself, as a proud South African, if there is anything left to be positive about?
Two of my children are currently working abroad; another close family member is on his way to New Zealand, seeking a safe haven for his children.
I recently visited my daughter in the fern country, and was shocked to meet so many South African families – all successful youngsters contributing towards the growth of the land of the All Blacks. I sent out some emails, phoned some business connections and asked: "What is left to be positive about South Africa?"
According to Dr Chris Harmse, chief economist of Rebalance Fund Managers, “in the last few weeks there has been a lot of negative sentiment about the South African economy and (this) has led to a feeling of terror and desperation among the normal man on the street."
Clouds of a final downgrading to junk by Moody’s, the ongoing in-fighting among the ANC cadres, and between President Ramaphosa and Minister Gordhan and Public Protector Busisiwe Mkhwebane on the other side; the Eskom saga, the incidents of xenophobia that have resurfaced and the proposal for a new government medical insurance scheme have all set the tone for this despair.
On the economic front, the negative economic growth of the South African economy of -3.2 percent during the first quarter of 2019, as well as the ever-increasing unemployment rate to 29 percent, fuelled the mood of negative sentiment.
Together with these, the ongoing US-China trade war, Germany's negative economic growth rate and prospects for a recession in Europe, not to mention the uncertainty over Brexit, led to the rand exchange rate depreciating by more than 140 cents against the dollar within three weeks.
So, is there anything positive about the South African economy?
What is clear is that the negative news that bombards the public daily is an overreaction, just like the sharp decrease in share prices on the JSE and the deterioration in the value of the rand.
Some positive economic fundamentals have already appeared, but were overshadowed by the ongoing negative perceptions.
Data from StatsSA published over the last three weeks point to a slow but sure recovery of the South African economy, but it seems to be unnoticeable by analysts and the press.
Seasonally adjusted mining production increased by 3.5 percent in the second quarter of 2019, compared with the first quarter of 2019. This is a strong recovery, especially when contrasted with the -10.8 percent in mining production during the first quarter of 2019 (it contributed 0.8 percent to the negative -3.25 percent).
Seasonally adjusted manufacturing production increased by 0.6 percent in the second quarter of 2019 compared with the first quarter of 2019. Manufacturing had decreased by 8.8 percent during the first quarter and contributed -1.1 percentage points to GDP growth.
Also of note are retail trade sales which increased by 2.4 percent in the second quarter of 2019 compared with the second quarter of 2018. In the same manner, so did wholesale trade sales, which increased by 5.9 percent in the second quarter of 2019, compared with the second quarter of 2018. Motor trade sales increased by 3.1 percent in the second quarter of 2019 compared with the second quarter of 2018.
It is also expected that the agriculture sector will also normalise during the second quarter after the shocking performance of -13.2 percent during the first quarter. Therefore, one can reasonably deduce that the South African economy is actually on its way to record an economic growth rate around 2.5 percent during the second quarter.
Other signs of an improvement in the economy are the lower inflation rate and possibility another cut in the repo rate during the second part of the year.
It is mostly expected that the rate of inflation is likely to remain under 4.8 percent for the rest of the year. The total number of civil summonses issued for debt decreased by 0.5 percent in the second quarter of 2019, compared with the second quarter of 2018, whereas total value of civil judgments recorded for debt decreased by 1 percent in the second quarter of 2019, compared with the second quarter of 2018.
I also asked the former chief executive of the Post Office: "What can be done to fix the negative sentiment about South Africa?"
“If we can reach a clear accord between government policy, social mandate and commercial necessity and then decide who’s going to do what and then leave them to get on with it, we’ll make progress in SOEs. Above all we need to make decisions and start doing things. We can no longer afford to wait for populist acceptance while the ground under our feet turns to clay and the forces of economic inequality approach to tear us apart,” said Mark Barnes.
It is undoubtedly the case that during a financial depression, a major factor is psychological. There’s no point in merely believing that the state of affairs is bad and waiting for the situation to improve. The only way anything will improve is by human beings doing something about it. A financial depression is not just going to cure itself.
Human beings need to get up, pick up the shovels and start digging their way out of it.
History has shown how tough and resilient South Africans are, often developing world-class solutions.
Our land covers topography from lush vegetation through to deserts. Cyclical conditions range from droughts to floods. Under these conditions, South Africans have produced agricultural products for domestic use and export.
We have dug the deepest holes in the world in our mines, bringing mineral wealth to the surface. Just recently, Transnet created a world record by running the world's longest train carrying iron ore to the coast.
South Africans have shown time and again that we have what it takes to get things done. We have the attitude when it counts. Now is when it counts.