Dear Readers,

As many of you know, I am a realistic and pragmatic optimist by nature. Despite our country’s enormous challenges, I think we can all agree that there are some economic green shoots emerging.

While we should never have allowed ourselves to be in the position of being “Grey-listed” in the first place by the Financial Action Task Force, Treasury has done a sterling job in ensuring our removal from the Grey List and bringing our country into line with global financial governance requirements. This is just a step in an ongoing process however.

Secondly, the Medium-Term Budget Policy Statement just delivered by the Finance Minister shows that SARS is getting back on track after being hollowed out, and tax collection is overshooting forecasts. Of course, tax collection has been boosted by gold and mining companies’ windfall revenue generation, but given the state of our economy, we’ll take the win. There is also an encouraging recognition to tackle seriously the illicit economy in order to sustain long term revenue collection.

Treasury’s acceptance of a new lower inflation target of 3% is to be welcomed too. Achieving and sustaining this will not only bring us into line with our global peers, it will help stem the corrosive effects of inflation that destroy wealth and savings. All things being equal, it should strengthen the performance of local companies and our financial markets.

Notably too, the Rand has been a relatively strong performer this year and while this is a mixed blessing with regard to offshore earnings, it again conveys relative confidence in the South African economy, albeit against the backdrop of a weakening US dollar.

Thus, there is some evidence of green shoots emerging, particularly as we have just received our first sovereign credit ratings upgrade in twenty years.

I think you will find the content of this month’s Wealth Matters particularly informative, so until next month, enjoy the read!

Sincerely,