By Lehlohonolo Lehana.
President Cyril Ramaphosa says that 100 days of the Government of National Unity (GNU) had shown an increase in confidence in the country’s direction.
In his weekly letter to the nation, Ramaphosa said that the positive sentiment was supported by actual progress in addressing some of the country’s most pressing economic and social challenges.
GNU was formed after the African National Congress (ANC) lost its parliamentary majority in the May elections for the first time since taking power in 1994.
Since the formation of the GNU, the rand has gained almost 5% to the dollar, local-currency bonds have outpaced all peers in an emerging-market index, and the Johannesburg Stock Exchange has hit successive record highs.
He gave examples like the work done to resolve the energy crisis, as the country has had more than 200 days without load shedding.
“Nowhere has this been more evident than in the work done to resolve the energy crisis. The country has had more than 200 days without loadshedding. This has made a considerable difference to the lives of citizens and the operations of businesses. This work has also unlocked unprecedented levels of investment in the energy sector,” he pointed out.
Ongoing reforms in the logistics sector are also improving the operational performance of port and rail networks, he added, which he said would positively impact export industries and broader economic activity.
He pointed to South Africans across society increasingly rallying around the programme and work of the GNU, saying this was reflected in recent opinion polls, and rising confidence in the country’ s economic growth prospects by business and local and international investors.
Ramaphosa said improved sentiment had boosted the value of the rand, which reduced the cost of oil and cost of fuel, in turn reducing the cost of living for all South Africans.
The positive sentiment, he said, would benefit the country’s fiscus, adding that the stronger economic outlook would improve South Africa’s credit rating, which would, in turn, “facilitate greater access to global capital markets and lower our borrowing costs.”
When we spend less money on debt servicing costs, government has more space to increase its expenditure on building public infrastructure and providing education, healthcare, basic services and social support,” Ramaphosa explained.
Increased business confidence would also attract higher levels of private investment in the economy, he noted.
When investors are more optimistic about their business prospects, they are more likely to invest more capital and expand their existing operations. Improved confidence also encourages the start-up of new businesses,” he added.
The President concluded by emphasising the importance of maintaining this momentum.
“It is clear that the improved confidence of the South African people and the positive sentiment among investors are well-founded.
“Our task now is to work together to further encourage hope and optimism by making a real and substantial difference in the lives of all South Africans,” he said.
Meanwhile according to a poll published by Ipsos on Thursday,10 October, four out of 10 people surveyed believe that the country is on the right track, compared with 20% in April.
Still, key concerns among those surveyed include unemployment, violent crime, inflation and social inequality, Ipsos said.
Finance Minister Enoch Godongwana will deliver the nation’s first medium-term-budget policy statement on Oct. 30 since the coalition government was formed. The policy priorities it outlines and updated economic forecasts will be closely watched by investors.