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The South African Economy – Are We Making Progress?

The South African Economy – Are We Making Progress?. Presented by: Dawie Roodt 3 September 2008. 4% of African area 23% of African GDP 22% of African Exports 20% of African Imports. Countries Compared to Provinces. Source: UN. Is SA the next Zimbabwe???. Zim - The Swartskaap.

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The South African Economy – Are We Making Progress?

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  1. The South African Economy – Are We Making Progress? Presented by: Dawie Roodt 3 September 2008

  2. 4% of African area 23% of African GDP 22% of African Exports 20% of African Imports

  3. Countries Compared to Provinces Source: UN

  4. Is SA the next Zimbabwe???

  5. Zim - The Swartskaap.. Down & Out? Source: UN Human Development Report, April 2008

  6. Destruction of Institutions Democracy:New Leader Appointed Ecstatic! Change Economic Policy: More ‘democratic’Take from the “Haves” (non-supporters) Give to the “Have-Nots”(supporters) IGNORES Private Property Rights Negative ImpactonInvestmentSavingsConfidence UNDERMINES Economy

  7. Destruction of Institutions Democracy:New Leader Appointed Ecstatic! Change Economic Policy: More ‘democratic’Take from the “Haves” (non-supporters) Give to the “Have-Nots”(supporters) Inflation: 11,200,000% IGNORES Private Property Rights Negative ImpactonInvestmentSavingsConfidence UNDERMINES Economy CapitalDwindles…. Start to Print Money DESTROYS Independence Central Bank Media & Press: Report on Disapproval and Objections by Public Court & Legal System:Public tries to find Justice through legal system DESTROYS Independent Judiciary BANS Freedom of Press

  8. Destruction of Institutions Democracy:New Leader Appointed Ecstatic! Change Economic Policy: More ‘democratic’Take from the “Haves” (non-supporters) Give to the “Have-Nots”(supporters) DESTROYS Democratic Process Democracy: Mugabe-Style1 Man, 1 Vote, 1 Candidate! IGNORES Private Property Rights Voting System:Public tries to vote dictator out Negative ImpactonInvestmentSavingsConfidence UNDERMINES Economy CapitalDwindles…. Start to Print Money DESTROYS Independence Central Bank Media & Press: Report on Disapproval and Objections by Public Court & Legal System:Public tries to find Justice through legal system DESTROYS Independent Judiciary BANS Freedom of Press

  9. Destruction of Institutions Democracy:New Leader Appointed Ecstatic! Change Economic Policy: More ‘democratic’Take from the “Haves” (non-supporters) Give to the “Have-Nots”(supporters) DESTROYS Democratic Process IGNORES Private Property Rights Voting System:Public tries to vote dictator out Negative ImpactonInvestmentSavingsConfidence UNDERMINES Economy CapitalDwindles…. Start to Print Money DESTROYS Independence Central Bank Media & Press: Report on Disapproval and Objections by Public Court & Legal System:Public tries to find Justice through legal system DESTROYS Independent Judiciary BANS Freedom of Press

  10. Destruction of Institutions in SA? Private Property Rights 2008: Land Expropriation Bill

  11. Destruction of Institutions in SA? Freedom of Press “Mbeki received R30m”

  12. Independent Judiciary Destruction of Institutions in SA? Zuma’s Mauritius Papers

  13. Independence Central Bank Destruction of Institutions in SA? SARB Hikes 10Times! interest rate

  14. Destruction of Institutions in SA? Democratic Process POLOKWANE

  15. ZimBOBwean Economy: Breakdown

  16. South African Economy: Breakdown Source: StatsSA, Q108

  17. South Africa:

  18. Economic Overview

  19. Private Sector Credit Extension Source: SARB and own calculations

  20. Household debt to disposable income Q108:78.2% 59.4% 56.9% 50.2% 44.5% Source: SARB and own calculations

  21. Savings to disposable income of households 9.2% 5.4% 2.6% 0.5% Source: SARB and own calculations

  22. Economic Overview

  23. Inflation CPIX Average: 2008 11.6% Source: StatsSA and own calculations

  24. Producer Price Pressure Source: StatsSA and Efficient Research

  25. Price Feeding Through… 26.0% in Basket Source: StatsSA and Efficient Research

  26. Inflation CPIX Average: 2008 11.6% Source: StatsSA and own calculations

  27. International Monetary Policy Source: Efficient Research, Aug 2008

  28. Super Cheap Money! Source: Efficient Research, Aug 2008

  29. Economic Overview

  30. Economic Overview

  31. Economic Overview

  32. GDP at Market Prices Average:3.0% Source: StatsSA and own calculations

  33. Breakdown of GDP Sectors

  34. Fixed Capital Investment Source: SARB, 2008

  35. Eskom: R343bn (5 yrs) Transnet: R78bn (3 yrs) 80 New Capital Projects – R336.1bn (2008 to June)50% higher than 2007’s total R224bn Government’s Infrastructure Spend Source: Budget Review 2008/09; Nedbank, 2008

  36. Economic Overview

  37. Background Deficit Gold Surplus

  38. Theory versus Practice expansionary FISCAL SURPLUS

  39. Spending Priorities Social Spending

  40. Social Grants Beneficiary Numbers Source: 2008 Budget 2007: 11,9m recipients 26.0% of SA population

  41. Correlation? Excise Duties vs. Social Grants 1% Increase in Social Grants = 0.49% increase in Excise Duties R-squared = 0.966 (small sample) Source: 2007 Budget, SARB Quarterly Bulletin; Efficient Research

  42. Redistribution Estimation:R1 in = R? out Source: Efficient Research *Average family consists of 4 people, aggregates taken per capita

  43. Aiming For Equality Source: Efficient Research

  44. Aiming For Equality Source: Efficient Research

  45. Aiming For Equality Source: Efficient Research

  46. From those who give….more will be taken

  47. Any Upside?

  48. Earnings Forecast: All Share Index Actual, 2008Q3 Source: Inet, Efficient Research

  49. Earnings Forecast: Resources Index Actual, 2008Q3 Source: Inet, Efficient Research

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