After what seemed like years of relentless downgrading of our economic prospects — and in turn the government’s ability to fund its growing debt — the move by one of the world’s three leading ratings agencies, S&P Global Ratings, to leave our rating unchanged and keep the outlook stable is a relief.
Localisation – substituting imported inputs with South African-produced products in manufacturing – is an important strategy by government. If successful, it will boost the local manufacturing sector and create desperately needed jobs.
The optimism as we enter the second phase of our vaccination rollout this week has been watered down somewhat by growing evidence that we are nearing our third wave of the Covid-19 pandemic.
To tell anyone that Eskom’s problems are multi-pronged would be an understatement of epic proportions – there are so many layers to the problem. One of its major challenges relates to the health of municipalities, which form the power utility’s biggest customer base.
Eskom’s restructuring path wouldn’t have been easy in simpler times, but in a period where its operational limitations have been laid bare and its revenue challenged by the Covid-19 pandemic, it’s been so much more challenging.
Whenever the topic of structural reform is raised in South Africa, it’s invariably linked to the story of Eskom and the country’s dependence on its ageing coal-fired power stations that have held back growth for more than a decade.
With an energy grid still in a desperate position as Eskom struggles to meet demand with its ageing fleet of coal-fired power stations, the procurement of additional and clean forms of power remains one of the top to-do items for the year.
In a search for elusive higher growth rates, conversations in SA have been about what further spending we could squeeze out of an already stretched Treasury or to question the Reserve Bank’s capacity to use monetary policy to stimulate an economy that has failed to breach the 2% growth mark since 2013.
What was a certainty at the start of the Covid-19 crisis last March was that the pandemic would severely test the country’s public sector healthcare infrastructure to degrees that it has never been tested before.
Essential to the creation of this “new” economy is bridging the digital divide.
These are truly extraordinary times; there is nothing that could have prepared us or any other country for Covid-19 and the questions it would pose not only for our health but for our way of life.
We can only brace ourselves for what may emerge in a third wave that many experts are pencilling in for June or July.