Fortify trade in the short-term as positive sentiment translates into tangible results

BUSINESS NEWS - There is some work to be done before the South African economy will begin to feel the effects of the current positive sentiment around the Government of National Unity (GNU), says Gareth Joubert, Managing Director at Hollard Trade Credit.

Joubert’s comments echoes the sentiments expressed by economist and political analyst Daniel Silke who is confident that the economy will rebound strongly in the medium to long-term.

However, both believe that while the long-term view of the South African economy is positive, with interest rates expected to continue on a downward trajectory, the positive sentiment needs to start translating into tangible outcomes.

Joubert says in the meantime, business owners are on their own and they need to make sure that they implement the necessary mechanisms to ensure they survive the short-term which is fraught with uncertainties, locally and at a global stage.

“As we speak, the world is on a knife’s edge as we wait for the US elections and results, and a win by the republican candidate is unlikely to bode well for Africa and South Africa,” says Joubert.

“Former US President Donald Trump has publicly stated that he will take a tough stance on trade relations between the US and China, South Africa being a small and open economy, is likely to be caught in the crossfire as the world’s largest and second largest economy trade blows,” cautions Joubert.

In the local economy, while there is optimism for the GNU to stay intact until the next national elections, there are other events on the political calendar that will have an impact on South Africa’s ability to sustain the positive sentiment and growth.

“The local government elections and the election of the ANC’s next president are the next political seismic events to keep an eye on,” says Joubert.

Silke and Joubert expect Africa and the SADC region in particular to experience sustained high GDP growth rates for the next few years compared with the rest of the world. “While South Africa is not likely to record similar GDP growth rates, the long-term picture is very encouraging,” says Joubert.

“However, businesses need to survive the short-term to take advantage of the expected long-term positive operating environment,” notes Joubert.

He says trade credit should be part of the arsenal needed to fortify and ensure sustainability for businesses while they navigate the unsteady short-term operating conditions.

Gareth Joubert