After a brief reprieve from Twitter during late 2019, Finance Minister Tito Mboweni returned to the platform with some stark warnings for South Africans.
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In a series of tweets posted on 10 January, Mboweni bemoaned the country’s “structural economic reforms inertia”, and said “if you cannot effect deep structural economic reforms, then game over! Stay as you are and you are down graded [sic] to Junck [sic] Status!! The consequences are dire. Your choice.”
If you cannot effect deep structural economic reforms, then game over! Stay as you are and you are down graded to Junck Status!! The consequences are dire. Your choice. Yep!! Askies!!
— Tito Mboweni (@tito_mboweni) January 10, 2020
There really was no good news about South Africa’s economy in January. We barely had time to wash the beach sand off our feet before the World Bank announced that it had cut the country’s economic growth forecast from 1,5% to 0,9% for 2020, due to electricity supply concerns.
This is below National Treasury’s last projection of 1,2% for 2020, and many analysts have said that it is highly unlikely that the country will again escape the downgrade to sub-investment grade by Moody’s Investors Service, the only ratings agency that still has the country on investment grade.
Tractor sales figures, which have long been used as an important indicator for producer confidence and the general financial position of farmers in country, have also shown a worrying decline.
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According to figures published by the South African Agricultural Machinery Association, tractor and combine sales in 2019 were the lowest they have been in five years. About 5 270 tractors were sold last year, which was 22% down from 2018, and 20% down from the 6 602 tractors sold in 2015.
Sales of combine harvesters decreased even more sharply, dropping from 198 machines in 2018 to 148 in 2019, which was a 25% decline.
Compared with 2015, 2019 showed a 31% drop. However, these statistics do not reflect the total power output of machinery purchased, which means that lower sales may reflect that farmers are purchasing fewer, but more powerful tractors.
Despite this, the decline in sales indicates that farmers are feeling the pinch of stagnant prices and economic decline.
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In another one of his not-so-cryptic tweets, Mboweni said: “Throughout history, those who wanted to change society have NOT being [sic] Conformists but Contrarians. I am on the faction of Contrarians! Slaughter and burn us at the stake!! History is on our side!! Cry Havoc!!” I cannot help but wonder if President Cyril Ramaphosa, who two years ago represented so much hope for our country, has fallen into the “conformist” faction.
Throughout history, those who wanted to change society have NOT being Conformists but Contrarians. I am on the faction of Contrarians! Slaughter and burn us at the stake!! History is on our side!! “Cry Havoc”!!
— Tito Mboweni (@tito_mboweni) January 10, 2020
What I do know is that South Africa has now entered last-chance territory and if the “contrarians” don’t score some big, early victories, the hard times will become even harder.
Make sure you prepare yourself and your business: diversify, consolidate and persevere! There are always winners in a crisis, and the good news is that, no matter what happens, people will still need to eat and, come February, drink.
