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23 Silver Linings

23 Silver Linings

In the Jan/Feb 2017 issue of aBr I indulged in a bit of numerological whimsy when I said that the number 23 would play an important role in 2017 in getting this country the leadership it deserves. Well, that pesky number 23 came up again at the Automechanika Johannesburg briefing on 29 June 2017.

It came up during Dr Azar Jammine’s upbeat presentation at the briefing, where he attempted to inject some good news into our current economic malaise. His argument is that whilst we are technically in a recession, there are short term positives, and most of these positives indicate the resilience of our economy, and that once we get the change of leadership we deserve, this resilience will form the foundation of an amazing change of fortune, and a massive boost to investors’ sentiment. Jammine did not number his observations, but I did, and guess what, there were 23 silver linings:

  1. The drought is over
  2. The electricity supply constraint is over (admittedly because of a drop in demand)
  3. However, the demand for electricity is recovering
  4. Over the past two to three years, South Africa has had relatively stable labour relations (with my caveat that the trade unions must be straining at the leash to sabotage this, as a recession must not be allowed to deter them from their mission)
  5. Inflation is under control
  6. The economic indicators point to a potential decrease in interest rates
  7. We have a relatively stable Rand – in actual fact it has stayed remarkably strong during the economic turbulence
  8. The PPI (producer price index) on new vehicles is actually in negative territory, which portends great things for new car inflation
  9. Fuel prices are at the same level as they were in 2012!
  10. South African businesses have strong balance sheets, even though the main reason is that they are holding onto their cash
  11. Global economic growth is on the uptick
  12. Commodity prices are forecast to improve
  13. The one commodity under pressure is oil, which is good news for non-producing countries such as South Africa
  14. Africa is rising, particularly East Africa, and we can leverage off this growth
  15. South Africa remains the biggest vehicle market in Africa
  16. South African automotive exports to the rest of the world remain robust
  17. Markets are looking beyond our current problems, and they have not lost their appetite for emerging markets
  18. The Rand is neither undervalued, nor overvalued, which puts it into a sweet spot for both exporters and importers
  19. Our trade deficit has improved
  20. Our automotive trade balance improved by R10 billion from 2012 to 2016 – still not where it should be, but we’re getting there
  21. Even though we have suffered some embarrassing downgrades this year, we are not yet a basket case
  22. South Africa is still rated by the agencies above many large economies, such as Russia, Turkey, Brazil, Nigeria, Argentina, Kenya, Ghana, and Egypt. And let’s not forget Venezuela, that shining example of centralised economies
  23. Number 23 is the real lulu. The rating agencies have adopted a wait and see attitude before they rerate South Africa, as they are expecting the right outcome at the ANC conference in December. Let us pray that this happens

So, hold tight and pray hard, as all our troubles may soon be over, boosted by 23 silver linings.

Add pic 0011: The authors of two upbeat presentations at the Automechanika Johannesburg briefing; left to right, Dr Azar Jammine, chief economist at Econometrix; and Konstantin von Vieregge, CEO of South African Shows Messe Frankfurt. Van Vieregge, in his address, gave this sound advice to the automotive aftermarket, “The Best Way to Predict the Future is to Create it”

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