The UCT Graduate School of Business recently hosted a frank discussion in Johannesburg to which two leading financial minds were invited to offer their thoughts on South Africa’s economic prospects prior to the election on 8 May 2019.

Most intriguing was the point made by the JSE’s chief financial officer, Aarti Takoordeen, that financial policy in Mauritius is intended to persist beyond regular changes of government and parliamentary positions. While the people executing that policy may come and go, the main objectives are written in stone, so to speak.

Fellow speaker Tsitsi Hatendi-Matika, head retail investment specialist at Absa, agreed that there is nothing more frustrating for an economy than a pre-election pause out of uncertainty of outcome.

According to Takoordeen, who has been very busy for the past 18 months engaging with both business and government in what she described as “the most constructive dialogue post-democracy”, there are reasons to be positive about the economy. South Africa has been very open and transparent with large global investors about the problems we face, she said.

“Investors appreciate that, as well as SA’s fiscal controls and highly regarded governance.”

She said that the JSE is working on improving regulations after the Steinhoff scandal and, despite occasional complaints of the cost of compliance, global investors are drawn to SA’s capital markets for the very reason that the country is constantly upping its game.

Additionally, plans have been drawn up to tackle Eskom’s debt problem and the government is poised to raise capital if it needs to borrow further. Leadership and governance issues are being tackled. In a sense, the preparation has been done and resources have been made available. But now it seems that the pause button has been pressed.

This means it’s more difficult to engage with global investors, whether they’re targeting equity positions or sovereign debt. While the country suffered a R53-billion net outflow from foreign positions in South Africa-listed equities in 2018 — and about half that again in 2019 to date, according to the Institute of International Finance — historical cyclical trends suggest the money will come back with some effort, but, again, this holding pattern of uncertainty does the country no favours.

Hatendi-Matika reminded us that, in a global economic context in which foreign capital investment has slowed and uncertainty prevails in major developed markets thanks to trade tensions between the US and China, Brexit and the Eurozone’s internal slowdown, president Ramaphosa’s capital-raising drive — which has seen a surge in commitments for investment from 2017 to 2018 — is an achievement to be praised.

In short, there are silver linings around some decidedly dark clouds hanging over South Africa. This country is not alone in enjoying a vibrant democracy eager for change and capital markets highly integrated with global investor sentiment, but it also has impressive market regulation and improving fiscal management. If the worst is behind South Africa’s economy now, the only way is up from a smaller base.

There is still much ground to be covered, of course. Both panellists agreed that a priority for the country is to act with urgency on information that is coming to light on fraud and corruption through various commissions of inquiry and other avenues. Additionally, it will be, as the IMF recently stated when it downgraded SA’s growth forecasts, important to ensure ongoing fiscal consolidation to stabilise public debt along with public wage savings and the elimination of wasteful expenditure, especially at state-owned enterprises.

Global investors have many options; SA is just one possible destination for capital. We cannot afford to delay the implementation of reformative and remedial action for too long, otherwise we run the risk of falling too far from investors’ radar. There is never a time when there are no global economic problem areas or challenges, so we need to accept that what is beyond our control is a given — all we need to focus on is getting our own house in order.

With less than 10 days before South Africans head to the polls, let us hope that there is little to no delay in pressing forward with the conversion of plans into tangible results after 8 May. There are many good companies with great track records here, as well as strong people doing good things every day. This translates into opportunity. There is no reason why the confidence levels in the country shouldn’t be higher. DM