Standard Bank CEO Sim Tshabalala expressed optimism on Thursday that SA’s economy might grow a bit faster than predicted in 2020.
Tshabalala was speaking at the Deloitte Africa Outlook Conference 2020 on the factors affecting the environment for business in Africa in the coming year and beyond.
Tshabalala said while the International Monetary Fund forecast that SA would manage only 0.8% growth this year – up from 0.4% in 2019 – the Reserve Bank was somewhat more optimistic, forecasting 1.2% growth.
Tshabalala said one could imagine an “upside scenario” which could see the economy end up doing better this year than most economists expected.
“It would include, for example, a clear and sustainable resolution for SAA. It would also include the short-term reforms proposed last year by the National Treasury, such as the introduction of multi-year multiple entry visas for business people and an efficient e-visa system for Chinese and Indian tourists,” Tshabalala said.
He said other reforms proposed by the Treasury included completing a spectrum auction, making the regulatory changes needed to allow more self-generation of electricity by large firms and improving the operational performance of Eskom.
Tshabalala said according to the Treasury’s modeling, if this kind of scenario played out, SA might be able to grow about one percentage point more, from 1% to roughly 2% by the end of the year.
He said the early signs seemed quite positive.
“The political barriers to achieving some of these reforms don’t seem insurmountable, so I’m mildly optimistic that SA might grow a bit faster than predicted in 2020.”
However, Tshabalala said companies should not just wait for reforms to take hold.
He said there were opportunities for companies to stimulate SA’s growth by focusing on expanding operations into more dynamic parts of the world, particularly China and other African countries.
He said this did not mean exporting to China only. Tshabalala said South African manufactured foods were in great demand in many other African countries.
“South African agricultural products and services (above all, tourism), also remain highly competitive in Europe,” he said.
Tshabalala said the strategy of expanding exports did not amount to leaving the country.
“The opposite is true: our businesses beyond SA generate a lot of income and a lot of jobs here at home – as they also do in the countries where they operate.
“Done right – skilfully, ethically, responsibly, within the law, meeting real needs – more trade and more outward foreign direct investment make life better for everyone, at home and abroad,” Tshabalala said.