According to CEO of the Steel and Engineering Industries Federation of Southern Africa (SEIFSA) Lucio Trentini, wage negotiations, general elections, load-shedding, high inflation, geo-political uncertainty and a volatile exchange rate are just some of what South Africa can expect in 2024.
Lucio Trentini CEO SEIFSA. Supplied by SEIFSA
“As the country prepares to go to the polls, we hope that politicians will finally embrace reality and commit to doing what is best for the country, and that the many examples of the dysfunctional state of local government can begin to be addressed through the ballot box,” says Trentini.
He adds, “Stats SA data showed that the economy contracted 0.2% in the third quarter of 2023 after two quarters of expansion, and the full year outlook is for the economy to have grown by a marginal 0.8%. This is not welcome news, given the backdrop of rising unemployment, along with increasing input and energy costs. The contraction also implies less tax revenue for government, which means even less money to meet its many commitments.”
He points out that in March it will be a full year since Kgosientsho Ramokgopa was appointed minister in the Presidency responsible for electricity in an attempt to solve the country’s energy crisis. Referring to the blackouts as the main growth killer in and already fragile economy, he notes SEIFSA’s hope to see some good news on the energy front in 2024.
It is his opinion that Treasury’s surprise announcement in early December to provide Transnet with a R47-billion support package to help meet its immediate debt obligations, among other commitments, will hopefully go some way towards helping the parastatal resolve its many challenges, which have had a devastating effect on exporters, including steel manufacturers. He notes the importance of the conditionality attached to the bailout, which includes ensuring greater private sector participation in the logistics sector, which will enhance efficiencies through competition.
Trentini adds, “Globally, the outlook remains weak, with the risk that interest rates will remain higher for longer adding to an economic environment that is generally unsupportive of economic growth. With the geo-political landscape remaining volatile, uncertainty abounds and impacts negatively on business and investor confidence.”
SEIFSA remains convinced that many of South Africa’s challenges can be best addressed through private-public partnerships. “Fixing South Africa can be done one way only – with government and business working hand-in-hand. The greatest opportunity lies in exploiting private sector participation in public infrastructure delivery through public-private partnerships,” Trentini concludes.
Source: SEIFSA