Although the recent welcome announcement that ‘the country is out of a recession’ the lacklustre conditions will continue for quite some time according to Isaac Mashego, Nedbank Senior Economist.
Credit is the oxygen of the economy and with consumers sinking under debt, business confidence at a 32 year low, Mashego says this is a cycle and with the resolution of political matters, business matters will be restored. “We haven’t pulled out of the global meltdown since 2009 and our political situation has not helped. The lack of political leadership had a devastating effect on the economy and business confidence.”
The political upheaval like the firing of the Minister of Finance, Nhlanhla Nene, then appointing the new Minister. David van Rooyen, and four days later reappointing Pravin Gordhan. In March, Gordhan was out and a week later South Africa was reduced to junk status and downgraded by international agencies.
He is still optimistic and believes there is a positive spin, global investment still favours South Africa rather than Brazil and Russia. This is due to our strong institutional governance such as the Constitutional Court. Mashego says, “We believe that South Africa should still attract investment.”