Old Mutual CEO Iain Williamson has warned of the increased risk of social unrest in the run-up to next year’s general election.
Social unrest in Durban and areas of Gauteng in 2021 resulted in billions of rand in damage to businesses and hobbled economic growth.
Addressing Bloomberg’s Future of Finance conference in Cape Town, Williamson said social unrest was one of the primary risks facing SA, followed by grid failure and the threat posed to SA’s bilateral relationship with the US as a result of the country’s stance on the Russian war in Ukraine.
SA’s access to the African Growth and Opportunity Act (Agoa) which gives preferential access to some of SA’s exports to the US market was “absolutely critical” for SA’s economic prospects.
Load-shedding had contributed to a heightened crisis of confidence and uncertainty and risk until after the 2024 election, Williamson said. “However, I think on a medium-term view things are significantly more positive,” he added.
The fiscal situation and the fiscal outlook is a lot stronger than has been the case for many years, and the policy change in the liberalisation of private sector energy production was significant, he said.
“There are reasons to think that if you take a two- to three-year view, load-shedding gets better, private sector power generation comes on stream, the fiscal outlook gets better ... we just need to get through the next year.”
Williamson believes the economy expanded in the first quarter off the low base of the fourth quarter of last year when GDP shrank. He expects growth to sit in the 2% range.
“I think we are going to see growth, but its probably coming from the low base and the tourism sector and the financial services sector. We are cautiously optimistic,” Williamson said.
Infrastructure also offered an investment opportunity, he added.
Williamson was part of a panel discussion with Naspers CEO Phuthi Mahanyele-Dabengwa, who emphasised that business was ready to contribute to a positive, sustainable future for SA, but a lot more action from the government was required.
Business For SA (B4SA), funded by members of Business Unity SA and Business Leadership SA members — is working with the government to resolve three major constraints to economic growth: energy, freight logistics, and crime. The co-operation had led to specific projects being undertaken, Mahanyele-Dabengwa said.
Business was ready for action, she said, adding was also cautiously optimistic about SA’s future.
ensorl@businesslive.co.za
