Business sector analytical, but optimistic ahead of Budget Speech

The business sector feels ‘cautiously optimistic’ about the budget speech, given President Cyril Ramaphosa’s pro-business State of the Nation Address (SONA), but still awaits the finance minister, Enich Godongwana to add colour to the picture.

Last month’s SONA was said to be the most pro-business to date. When the president confidently said, “We all know that government does not create jobs. Business creates jobs.”

Although the speech did not go into full depth, the business sector cheered at the thought of prioritization of their sector.

According to Alpha Holdings CEO, Kerry Fynn, local business does not need to feel cautiously optimistic because of the synchronised global growth as the world tries to return to ‘post-pandemic normal’.

“This means that production and supply chains are ramping up and the demand for commodities as well. This is the area South Africa excels in,” analysed Fynn.

Furthermore, the YPO Africa member believes there is potential to increase employment numbers and generate foreign revenue. He also believes this will help reinforce the current account of SA’s surplus and tax revenue collection recovery.

Although the recent survey shows confidence in global economic growth, South Africas situation might be more complex.

Fynn says on one hand we should be able to generate reasonable growth from being the exporter of commodities. On the other hand, we have “sluggish GDP and bureaucracy which hampers business and curtails growth.”

“Should interest rates increase by significant margin, the consumer base that is already under financial pressure will struggle,” added Fynn.

Another problem that South Africa is faced with is that of unemployment and income inequality. However, because the country has a young and expanding population that is increasingly mobile and aspire to enhance their lifestyles, this creates an opportunity for an economic growth.