Africa-Press – South-Africa. Remgro CEO Jannie Durand says that slow economic growth and high unemployment are likely to persist unless South Africa adopts pro-growth policies.
Durand shared his views about the South African economy and the country’s business sector during an interview with Biznews.
In South Africa, the economy is not growing, there is high unemployment, and consumers are not spending. This does not bode well for the country.
“What we see in all the industries we operate in is overcapacity. The production lines, for example, are not used to capacity,” he said.
This situation means there is no need to build new factories, which, in turn, means that there will be no additional employment.
He highlighted an important economic indicator and measure of the middle class for South Africa: the number of people on medical aid.
“The number of people on medical aid has not increased over the last five years. The memberships may have been stable, but people are buying down,” he said.
Simply put, the situation is going backwards. This aligns with South Africa’s GDP per capita, which has shown that citizens have been getting poorer over the last 15 years.
“I don’t see the situation getting much better in the short term, unless South Africa gets pro-growth policies,” he said.
This makes life difficult for Remgro, which operates in South Africa, as it is difficult for companies to show meaningful growth.
“Remgro is a reflection of South Africa, which means that it is closely linked to the growth of the South African economy,” Durand said.
The challenging environment goes beyond a tough trading environment. It also makes mergers and acquisitions difficult.
He explained that the volatile environment in the South African and global market forces them to put a large risk premium on buying new assets.
However, due to the high risk premium, the numbers do not always work to be able to strike a deal or make an acquisition.
There are positive signs in South Africa
Remgro CEO Jannie Durand
Durand said there are positive signs with the government and private sector joining forces to address some of South Africa’s challenges.
“I am involved in the workstreams in the government where we talk about matters such as energy, logistics, crime, and corruption,” he said.
The support of the private sector and the resources it is making available have helped to alleviate some of the problems.
“Load-shedding has improved dramatically. However, logistics linked to the railways and Transnet are still a challenge,” he said.
“We are making significant progress behind the scenes to address crime and corruption in South Africa,” Durand said.
“We are helping to get South Africa off the grey list. We are also making a digital evidence unit available to the National Prosecuting Authority (NPA).”
He said there are many initiatives behind the scenes to address the country’s challenges and get the economy going.
However, while there is progress, the Remgro CEO highlighted that it takes time to see the results of their initiatives.
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