Resetting South Africa
Some commentators said that the inauguration of the President of South Africa was reminiscent of 1994: a resurgence of hope and an optimism about the future of the country. Certainly, as I watched Cyril Ramaphosa’s swearing in, I felt more positive about the country’s prospects than I had in some time.
While an ANC win was inevitable, the ruling party’s reputation was severely tarnished by the revelations of the depth of state capture and the number of government officials involved in various degrees and manifestations of corruption. I am assured that, had Jacob Zuma still been the President, the ANC vote would have been closer to 50% and they would have lost Gauteng. Voter turnout dropped (65.99% of registered voters, contrasted with 73.5% in 2014), no doubt attributable to disillusionment with any of the political parties’ ability to effect change.
Strong leadership for investor confidence
As I write this, we are awaiting the announcement of the Cabinet by the President. That he will be able to compose this body completely free of any questionable members is unlikely, but he has assured us that it will be a leaner one. During his nine-year tenure, Zuma’s Cabinet swelled to 35, with ministers earning over R2 million a year and their deputies R1.9 million. Tax-payers want to have the confidence that their contributions for the betterment of the country are used for just that – and not for lining the pockets of fat-cats.
In addition, we expect the President to get the economy back on track, with positive gains for the Rand. A stable government with clearly-defined policies will engender investor confidence and encourage more inflows of foreign direct investment and local investment into the country. President Ramaphosa needs to provide clarity on such issues as land appropriation without compensation, and the nationalisation of the Reserve Bank. People only invest when they know that their money will be safe.
Ramaphosa’s ability to get the economy on track and to rid the ANC of individuals tainted by corruption and links to state capture is crucial to a more secure outlook. A stronger economy will generate an environment more conducive to a collaboration between government and the private sector – creating jobs is a priority not to be ignored, both for a thriving economy and to manage an increasingly hopeless unemployed, unskilled South African youth.
Our investment consultants will be watching for political and economic developments, ready to make changes always in the best interests of our clients. While I believe that Cyril Ramaphosa is the man best placed to lead this country to a more prosperous future, that future remains an uncertain one, and we are investing in the wake of a difficult time for both the country and our flagging market.
With so much focus on local happenings, it is worth noting that global factors (such as a weakened UK market and tensions between China and the US) impact equity markets significantly than a local event such as the outcome of our elections.
Matching your vision to your values
I find President Ramaphosa’s vision of “friendship, solidarity and co-operation” a hopeful one. So much can be achieved by a shared goal and solid values. When Barclay and I merged our companies 20 years ago to establish Chartered Wealth Solutions, we had a vision: to create a company committed to serving its clients with excellence.
We little knew that the Chartered team of four at the time would grow to a company of more than 80 staff and would extend our service to include Chartered Tax and Chartered Legacy & Trust. Our recently established Chartered Invest enables us to ensure that our vision of excellent service is consistent through every client interaction. When we receive positive feedback from our clients, we recognise that it is because our values pervade the company.
President Ramaphosa’s vision of “a society in which our worth is determined by how we value others” resonates with me, and I join his call of “Thuma Thina” – Send Us.