Policy Uncertainty Index
If there is one thing the markets hate, it’s uncertainty. And if there is one thing the ZA government is good at, it is inflicting uncertainty on us.
So it is good that our chum Professor Raymond Parsons and his team at NW University have come up with a new Policy Uncertainty Index for ZA.
While the launch this week was a bit underwhelming, with too much focus on methodology and too little on the actual findings for Q4 2015, we can only hope that this becomes a valuable tool for those responsible for all the uncertainty, as well as those who are trying to make sense of what is happening in ZA.
The events late last year, when President Zuma changed his Finance Ministers more often than he changed his socks gave the markets a scare, hit the rand, and arguably led to the latest painful jump in interest rates. While we appreciate this is good for savers, most of us are borrowers, and we are going to hurt.
As with most indicators, the trend can be very important, so while it is worrying that the index jumped from its base level in Q4, it will be interesting to see whether any stability is being achieved in the wake of the return of Pravin Gordhan to the Treasury when the next data are released. The budget on the 24th should give a reasonable indication of whether he is going to open the floodgates of spending and borrowing, to appease disgruntled ANC supporters, or whether prudence will reign – which might help us avoid a further ratings downgrade to junk, or dog poo, or whatever is used for economies where the fan is turning a nasty brown colour.
It would be sad to think that spreading policy uncertainty is one of the few things our political leaders are good at.
We have discussed in the past the importance of OUTA, which began as an anti-toll movement, but is evolving into a wider advocacy movement against unjust taxes and corruption. ZA Confidential visited the OUTA offices this week, and was impressed by the clarity of thought and commitment of OUTA leader Wayne Duvenage. A media briefing is being planned later this month to give some insight into the methodology and strategy of the movement, which seems to be attracting growing support and will hopefully be able to match this with sustainable funding.
Tweet of the Day:
Shit Jokes (@ShitJokes): Last night I tried wife swapping for the first time, it’s brilliant!! I managed to get a new lawnmower for mine.
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