Your money wants to bet on South Africa, right?

Is South Africa still a winning investment despite the headlines and struggles?

Whether you are an investor looking for more certainty, more return or more impact, STANLIB has a fund solution for you. The STANLIB Your Money Can Do More podcast series hosted by Bongani Bingwa and STANLIB Chief Economist Kevin Lings features experts who will help potential investors navigate and plan for tomorrow, today.

In this episode, Bongani and Kevin welcome Melanie Verwoerd, political analyst, author and speaker, and Dr Ralph Mathekga, political expert in the geopolitical intelligence services, to discuss the impact of the current economic, political and social situation in the country on investments and if you should on a recovering South Africa.

Listen to the audio and subscribe to the podcast on Apple Podcasts or Google Podcasts.

Like most countries, South Africa is recovering from the Covid-19 pandemic, in hopes of rebuilding our economic status and providing work opportunities for those who have lost their jobs during this period. STANLIB Chief Economist Kevin Lings said it will take a few years to tackle the unemployment crisis, but the slow progress we are making now will be worth it.

We are not yet at that stage where we are really accelerating growth significantly, and therefore making a big difference in people’s lives in a very visible way. It all looks like it’s going to take a lot longer.

Kevin Lings, Chief Economist at STANLIB

The country’s workforce has shrunk by more than 1.5 million people since before the pandemic, and we will need to employ around 600,000 people a year to keep up with population growth, Lings said.

It is not only our employment rate that needs to change, our political status was also criticized last year with corruption and uncertainty levels on the rise. This too is improving at a seemingly slow rate, but according to Dr Mathekga the problem runs deeper than we think and small changes are vital.

I think it all has to do with the realism of our expectations… and it has a lot to do with how we understand the depth of the problem we encountered.

Dr. Ralph Mathekga, political expert at the geopolitical intelligence services

We have had nine wasted years where corruption was in fact cemented in almost every sector of government except notably the judiciary which stood up and pushed against it.

Dr. Ralph Mathekga, political expert at the geopolitical intelligence services

Due to political uncertainty and a need for jobs at an all time high, the country faced another problem: social unrest. The recent riots have shown that people are desperate and frustrated. Even though this put another dent in our economy, it could have been a lot worse, says Verwoerd.

She also mentions how saddened she is at the harshness with which South Africa is often judged by many first world countries, which is linked to an Afro-pessimism held by international and domestic investors. Despite all the bad press that followed the riots, Verwoerd believes there is a silver lining beyond the chaos.

The good thing it was showing through it all was that the whole country did not go up in flames. It could have easily, but it wasn’t… The social fabric has helped social communities to get involved again and say “we are not allowing this country to burn down completely”… I think it is is also a very good sign that despite the challenges we faced in terms of riots – that the rest of the country has actually helped.

Melanie Verwoerd, political analyst, author and speaker

Is South Africa still a winning bet for foreign investors?

To answer this question, we will have to divide the foreign investment into two parts. The first, being foreign direct investment, where investors come to South Africa, use their money and expertise to produce goods and export those goods.

This is the ideal type of foreigner, but unfortunately we do not attract this kind of investment because South Africa by international standards is considered one of the most complicated places to do business. .

On the other hand, there are foreign portfolio investments, where a foreign investor simply invests in our stock market and the government bond market.

As Lings explained in the previous episode, foreigners invest a large amount in South African government bonds because they get a good yield. Today, 30% of corporate and government bonds are held by foreign investors, so we have no problem attracting investment in this area.

It’s invaluable to talk to a foreign investor who invests in emerging markets and ask them to put South Africa in that context and then you hear a different perspective, you hear a perspective that says “you know what? South Africa is not too bad if you consider the competitive package.

Kevin Lings, Chief Economist at STANLIB

As a country, we tend to compete with the United States, the United Kingdom and many parts of Europe in terms of investment. Regardless of this unfair comparison, we are still an emerging market for investors even though we have flaws.

One of the ways that South Africans can invest in our country while we are still recovering is with the STANLIB Fixed Income Fund, managed by a dynamic and very experienced investment team at STANLIB. The dynamic and highly experienced team aims to achieve returns by identifying investment opportunities in fixed income assets based on the duration of the investment, return opportunities, and interest and rate cycles. inflation.

To find out more about how STANLIB is helping and preparing its clients’ investments for the future, visit www.STANLIB.com/more now!


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