BLSA’s CEO’s Weekly Newsletter – The GNU has triggered a marked improvement in the relationship between business and government
A week ago, the Government of National Unity passed its first 100 days. The report card I think is broadly positive. The new government has notched up several successes and helped embed a sense of optimism that we may be able to achieve meaningful economic reform. Financial markets have clearly signalled this optimism, with the rand 7.5% stronger, the bond market 11% stronger, and the JSE’s main index up over 10%. That really helps business confidence – it makes it easier and cheaper for government to raise debt and for companies to raise funding for new investment. While it is too early to see this in figures for investment by companies into new capacity, it should help momentum, and that should translate into growth. Understandably, many have been concerned about the sustainability of the GNU, given the experience of unstable coalitions we’ve had (and continue to have) at local government level. It would be highly damaging were the GNU to fall apart, reversing the tentative confidence that has begun to take hold. Yet, so far, when tensions have arisen they have been dealt with maturely in a way that puts the country first. Long may it last. From a business […]
