Addressing The Nation - Letter From The President

By Fiona Wakelin

In his letter to the nation, penned on Monday, 14 October 2024, His Excellency President Ramaphosa focused on the 100+ days of the GNU and South Africa’s economic growth prospects.

“Just over 100 days have passed since the members of the Government of National Unity were sworn into office. In that time, we have witnessed a marked increase in confidence in the direction of our country. South Africans across society are increasingly rallying around the programme and work of the Government of National Unity. This is reflected in recent opinion polls. In one of these polls, conducted by Ipsos, it is said that the proportion of participants who believe that the country is heading in the right direction has doubled since the last surveys were conducted in April and June this year,” – H.E. Ramaphosa

This improved sentiment is echoed by business and local and international investors across the world from Beijing to New York and London. In September, the Bureau of Economic Research and Rand Merchant Bank published their first Business Confidence Index since the formation of the Government of National Unity and it too reflects “cautious optimism” about improving business conditions in key economic sectors – stating that improved electricity supply and political certainty following the elections have been important factors in this improved business confidence.

“So how important is this improved ‘sentiment’ for our economy and country? Sentiment is more than a ‘warm and fuzzy’ feeling. It is made possible by real developments in the economy and the country. Business confidence goes beyond discussion in boardrooms and conference halls. It is about the interest that is shown in our economy by all investors, both local and offshore. Sentiment has a direct impact on people’s lives as it can manifest itself in increased investments that can result in job creation. Improved investment sentiment will benefit our country’s fiscus. A stronger economic outlook will improve South Africa’s credit rating, which in turn will facilitate greater access to global capital markets and lower our borrowing costs,” – President Ramaphosa.

With improved sentiment comes an increase in the value of our currency, which in turn reduces the cost of imports such as oil, which reduces the cost of fuel – which has the domino effect of reducing the cost of living for us all. When investors show increased optimism this is reflected in the investment of more capital and the expansion of existing operations, thereby increasing job opportunities.

Improved confidence also encourages the start-up of new businesses and increased local spend on goods and services further stimulates economic activity.

“It is still early days for the Government of National Unity. The growth of our economy is still to pick up pace. However, a firm foundation is being laid, our growth prospects are being revised upwards and we are heading in the right direction. It is clear that the improved confidence of the South African people and the positive sentiment among investors are well founded. Our task now is to work together to further encourage hope and optimism by making a real and substantial difference in the lives of all South Africans,” – His Excellency Ramaphosa.