President Cyril Ramaphosa is, through his engagement with the business community, instilling confidence in the country’s economic trajectory, says the Investec chief executive.
“If you compare the [current] mood to the mood six months ago or four months ago, we’re in a different country so I do think the South African economy will start gaining traction. There are a lot of initiatives and commitment both from government and business, and hopefully from labour, to create a social contract that is needed in society,” Stephen Koseff said referring to a CEO Initiative meeting with the president and various cabinet members.
Under the auspices of the CEO Initiative, Koseff and Goldman Sachs’s Colin Coleman are leading the Youth Employment Services (YES) Programme geared at proving one million youths with internships over a three-year period. The CEO Initiative was formed by business leaders in 2016 in a bid to work with government and labour to address the country’s challenges.
According to Koseff, Ramaphosa’s engagement with business at the meeting was reminiscent of former President Nelson Mandela in that he has created a totally different mood, one which people really want to help and make a difference. “He understands what the business community is about, he understands how to talk [to them] because he was part of it. He was part labour, then business and now he’s a politician,” he added.
Ramaphosa’s election as leader of the ruling party last December and president of South Africa last month has already led to a significant improvement in the outlook for the country. The president’s intervention in the controversial mining charter, changes to cabinet and plans to tackle graft and the mismanagement of state-owned enterprises have thus far been well received, with the RMB/BER business confidence index rising to a three-year high in the first quarter.
Koseff said that Ramaphosa’s election was positive for the country but that it is now up to the president and government to create a business-friendly environment, which enables investment. He said a business-friendly environment would enable the economy to grow in excess of 5%, which would lead to the creation of the right type of jobs.
Koseff was speaking after the banking group released a pre-close trading update for the financial year ending March 31 2018. During the period, the bank withstood political uncertainty in South Africa as well as uncertainty over Brexit in the UK, which it said impacted consumer and corporate confidence in both of Investec’s core geographies.
The banking group said the appreciation of the rand relative to the pound is to have a positive impact on its financial results, with revenue expected to be ahead the prior year and adjusted operating profit in line with the prior year.