Economist foresees brighter future for Richards Bay
Inflation 'should drop like a stone', says Roelof Botha
AFTER a stormy year of political uncertainty, an erratic rand and a global commodity crash that in the past two years lashed local industries, economist Roelof Botha is predicting sunnier days ahead.
Speaking at the PwC budget breakdown address in Richards Bay on Thursday, Botha emphasised the metals and minerals price slump that put some of the region’s most prominent operations under pressure, is showing signs of bottoming out.
According to figures from the World Bank, iron ore and coal prices increased by 41% and 35% respectively between the end of 2015 and 2016.
‘This is great news, especially for this area,’ said Botha.
‘We turned the corner before going into recession thanks to our diverse economy.’
He emphasised the number of black South African households in the income category of R650 000 per annum has more than doubled from 2011 to 2015.
‘This is a first in history and a magnificent shift that shows how inequality in our country is dissipating by the day.’
According to XE Currency Tables, the rand had strengthened by 25% against the British pound, 17% against the euro, and 15% against the dollar on January 29 compared to the same time last year, but Botha said the instability of the rand remains a concern.
Despite this, he said he would not be surprised if the rand – currently standing at R12.95 to the dollar – strengthens to R12.50 this year and inflation to ‘drop like a stone’.
‘Tourism is starting to recover after the visa chaos caused by Home Affairs.
‘Arrivals have increased from less than 1.5 million overseas visitors in 2015 to nearly 1.8 million last year.
‘Job creation is below target, but is still a good story to tell with 2.1 million jobs created since 2010.’
He added he does not believe the Reserve Bank will raise interest rates within the next two years.
Team SA
‘At the end of the day, what this country needs is teamwork,’ said Botha.
‘We need to move away from racial classifications and strive to work together as fellow South Africans.
‘I believe the potential growth drivers for our economy this year includes further economic recovery in Europe, deepening of democracy at municipal level, lower inflation, a declining interest rate trend, further strengthening of metal and minerals prices and significantly higher crop yields.’
He concluded SA certainly secured bragging rights for meeting basic needs with three million RDP houses, 2 000 new health clinics, access to clean water for 10 million people, new sanitation facilities for seven million people, 4.5 million new electricity connections, a primary school nutrition programme for five million children and 16 million new social grant beneficiaries.
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