The end of a year, and the arrival of another, is a good time to take stock. 2013 saw many changes in South Africa. It saw the death of Mandela and the birth of ZA Confidential. It saw Jacob Zuma in trouble, but Oscar Pistorius in much deeper trouble. And it saw many of our concerns about the economy intensify. So here – in no particular order – are ZA Confidential’s twelve fears for 2014:
Inflation, and especially food inflation:
The official CPI inflation number is around 6%. But as we have reported more than once this year, this number masks a much steeper level of food inflation, which threatens to rise even higher with further protection against imported chicken, frozen potato chips and a very weak rand affecting many imports. Shopping over this festive period I have for the first time in my privileged life put goods back on the shelf because of their price. While many experts are predicting inflation will remain fairly muted in 2014, I fear further large hikes in food prices, which on top of higher motoring costs (see below) will mean that we have less to spend unless we have generous employers or some other way of boosting our incomes. The knock-on effects on restaurants, coffee shops, book and CD stores, and so on, may well lead to some casualties. It would be time for more belt tightening – if only we could afford the belt.
There are too many unemployed people at the end of 2013. I don’t see how much will have changed at the end of 2014. Government has a responsibility to create the right conditions for job creation, but in some areas, such as labour legislation, it is doing more harm than good. And the economic illiteracy of some of our more populist politicians will not do much to help.
This is linked to job creation, and is equally worrying. The ZA economy is limping along and there is not much prospect of any significant uptick in 2014. High food inflation could trigger more labour unrest – and we saw what that did to the economy this year.
Our power utility has lost its most senior executives at a time when there is a desperate need for more generating capacity to be brought on stream, and government is still dithering over a new nuclear build. The politicians and bureaucrats plunged us into darkness in 2007/8. I fear we may see serious problems again in 2014, even if these may be masked from view by quiet arrangements to shut down factories and mines. Industry has an important role to play by keeping the spotlight trained on the frailties of Eskom.
We referred to this earlier. Militant labour stokes inflation, slows economic growth and scares off investors. Look out for another hat trick in 2014.
We need foreign investors, and BMW clearly sounded the warning bells when it walked away from a major expansion in SA. Many more similar decisions are being taken away from the public gaze. Destructive actions and declarations by some of those politicians with the most influence over these matters can do great harm, but we have some very left-leaning people in strategic Cabinet positions. And that may not change much after the next election.
South Africa is not alone in facing this problem. However, things do not appear to be getting much better here, and the lack of conscience or responsibility of some of our political leaders is shameful. This is an underlying cancer affecting both the economy and the wider society, and the likely re-election of the same bunch does not bode well.
This is the foundation of our future, and far too many of our young people are not being properly educated. There is little sign of the necessary leadership to tackle this fundamental challenge, and it is certainly an area where business should have a louder voice and a more constructive role. We have entrusted this to the politicians and generations of South Africans will forever bear the scars.
With rising medical inflation and often squalid and inadequate state healthcare facilities, this really scares me. There are bold plans for a universal upgrade, but how is this to be funded? Too many questions remain.
In some respects the weakness of our currency reflects an underlying economic malaise. The wobbly rand should be helping our exporters, but there is not massive evidence of this, perhaps because of the recent labour problems in the auto sector.
The cost of motoring:
Petrol prices rise again at midnight. This unhappy New Year development comes alongside the recent incomprehensive introduction of eTolls, Interest rates are likely to begin rising again this year, insurance charges are overtaking the inflation rate. And yet there is no safe, efficient public transport alternative for most South African motorists. I am not sure what the automotive sector can or should be doing about all this, but one does not hear enough from its leaders.
eTolls are just one example of the State getting things wrong. New secrecy laws are another, as is the desire to clamp down on alcohol sales and advertising. The Blue Label bureaucrats like bossing us around but do little to inspire our confidence. The fake sign interpreter at Mandela’s memorial was just another sign of what can go wrong when we put trust in people with poor skills and judgement.
There is a lot to worry us as we enter a New Year. However, there are developments in areas such as IT and telecommunications which could bring hope and progress. ZA Confidential thanks all those Experts who have given us their views and thoughts in our launch year. We wish all of them and all our readers and subscribers a healthy, happy, safe and fulfilling 2014. And God Bless South Africa, watch over its people, and give wisdom to its leaders.
Tweets of the Day:
Latie (@latie_jonker): A survey shows that 20% of men kiss their wife goodbye when they leave the house and 80% kiss their house goodbye when they leave the wife.
Latie (@latie_jonker): I was in the pub when a guy called me a cheapskate. So I threw his drink in his face.
The QI Elves (@qikipedia): Some mornings, it’s just not worth chewing through the leather straps. – EMO PHILIPS.
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