Standard Bank CEO Sim Tshabalala yesterday said that business will have to get on with life and adapt to the new post-election environment no matter which coalition government emerges.
This comes as political parties are engaged in crucial discussions about forming a coalition government before Sunday next week’s deadline after the ANC lost its parliamentary majority for the first time since 1994.
Tshabalala yesterday said it was not up to business to figure out the permutations of the future, but what business can do was to imagine what the possibilities were and make sure that it was able to respond.
“If you’re a democrat and you respect the Constitution of the Republic of South Africa, you have to accept what the electorate says and you have to run your business or your institution – whether it be the Fourth Estate, the church, the trade union, or a business – run it according to that outcome,” Tshabalala said.
“Many of us have got preferred outcomes, but as somebody running the institution that is Standard Bank, my interests and what I would like is irrelevant. We need to make sure that Standard Bank is appropriately positioned and able to deal with the government that the people of South Africa have chosen once Parliament has risen.”
Tshabalala was answering questions at the S&P Global Ratings agency’s South Africa Conference after delivering a keynote address on how geopolitical factors could influence South Africa’s trajectory.
In spite of investors calling for an ANC/DA coalition government as “market-friendly”, Tshabalala dismissed fears that there was a possibility of instability in the country as the state institutions were there to safeguard the democracy.
“I do think that we’ll have stability. The elections have happened and people have complied. There’s a possibility of challenges. We need to follow what the courts have said,” he said.
“So I’ve got no doubt that the institutions of South Africa will continue to function. The IEC is just one of those places, as are the courts.
“South Africa has had a majority government since 1948. It’s had 10 elections since 1980. Of those 10 elections, eight have been followed by a rally in the equities, in the bond market, and in currencies. And the data supports the view that we may see the same happening this time as well.”
The formulation of a prudent coalition government is crucial for South Africa’s economic survival, more so after gross domestic product (GDP) unexpectedly contracted in the first quarter of 2024, dragged lower by low production in manufacturing, mining, and construction.
Absa’s chief economist, Jeff Gable, yesterday said the new government administration must be the one that fosters an environment which encourages private sector participation in the economy, enables job creation and continues with fiscal prudence at National Treasury.
Gable said Absa was forecasting GDP growth of 1.1% for 2024 as the supply of electricity constraints starts to ease and getting business going.
“So we may not have had a recession, but we are 15 years into kind of a no-business cycle, super low-growth environment in South Africa, and that matters a lot,” Gable said.
“And so the task of the incoming administration is going to try to find ways in a sustainable way to help South Africa grow. In that space, we’ve got a couple of different overlapping focus areas. One thing that’s very front of mind right now is just the health of the consumer. Where you have consumers on the back foot, the economy is not going to grow.
“But investment more broadly is absolutely critical, and that's going to be about in generating an environment where businesses feel more confident, where the rules of the game are a little bit cleaner.”
BUSINESS REPORT