Anticipated reshuffle

The much-anticipated cabinet reshuffle has come and gone and here are some of my thoughts

• The appointment of Nhlanhla Nene is a positive move, and is well received by the markets; however, as I’ve said a few times before, it’s going to take a very long time to fix the country’s ailing finances.
• Pravin Gordhan as SOE minister is also a positive move as this is the very sector that created the grave problems in respect of state finances. Expect a few board changes quite quickly. This area is key as the country can’t afford any more bailouts. PG has his work cut out for him.
• It’s disappointing that we have the same size cabinet, but the President alluded to the fact that this will be addressed in due course.
• There are of course many compromise appointments in this cabinet, but that’s politics for you – you win some, you lose some.

Now we need to see concrete steps to fix the ailing economy.  

We may just have escaped a credit downgrade from Moody’s and my best guess is that we remain in the recent range of 11.5000-11.8000 for the foreseeable future. The land expropriation without compensation issue is now a massive question for South Africa: how do we address this issue without affecting food security and the broader economy. It’s a very complex issue and will need the collective wisdom of South Africa’s finest minds and a healthy dose of goodwill to put into place. 

Strap yourself in tightly folks 

It’s going to be a very interesting period in South Africa. Expect some very difficult deliberations and decisions. Volatility is a given – but at least in the short term, the country is in a better space. Growth should pick up marginally, theft and graft should be arrested (at least at SOE level), inflation is under control and there’s a vision for the future – let’s knuckle down and get the work done.

All the best.