South Africa: Confidence Is Like Compound Interest - in the Short Term It's Hard to Notice, in the Long Term, It's Crucial.

opinion

Confidence is a funny thing. A quick google search defines it as 'the feeling or belief that one can have faith or rely on someone or something'.

In South Africa, confidence is sorely lacking. Post the Global Financial Crisis, business confidence peaked in 2011 and gradually moved lower through 2012, 2013, 2014 and 2015 before collapsing to below neutral levels at the end of 2015 when then-president Jacob Zuma fired then finance minister Nhlanhla Nene. It has never recovered.

Weak confidence is also visible in the household sector. Household cash holdings as a percentage of GDP are back to 1994 levels. This is reflected in weak vehicle sales, which have been shrinking since 2017. After the brief Ramaphoria blip of mid-2018, confidence continues to languish around zero.

It took four years for business confidence to erode under Zuma. With that perspective, it is therefore not surprising that Cyril Ramaphosa hasn't managed to rectify the problems in a mere 18 months.

The rot of the Zuma years runs deep. Institutions have been broken as their goals were perverted. Staff have left. For example, I'm told that the National Prosecuting Authority employed one forensic accountant in February this year when Shamila Batohi...

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