No stable economy with volatile political climate

“Politicians saying stupid things are simply not good for the economy,” said economist Dawie Roodt.

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Speaking at the Monsanto conference, Roodt said that political and social instability was harming the country and that strong leadership was needed to prevent South Africa from damaging investor confidence to the point of no return. Roodt was referring to statements made by mining minister Susan Shabangu that mine licences would be revoked unless mining companies complied to government ‘prescripts’; and Gwede Mantashe, secretary general of the ANC, that foreign-owned mines were ‘stealing SA’s money’.

He said that comments like these could lead to SA banks having their ratings downgraded, as happened last month. Economic growth was expected to be 2,5% for 2013, which Roodt said was “very, very bad”. “The expectation was higher for this year, but had to be reduced because of the fallout from Marikana, farm worker strikes and subsequent negative comments made by government and stricter labour laws.” He said that while interest rates should remain low, the rand would weaken, averaging between R8,50 and R9,50 to the US$. “There will also be extreme volatility in energy prices, especially with regards to oil.”