From the Desk of the MD - April 2018
Category From the Desk of the MD
Private sector investors are queuing up to invest in SA at the moment as we saw this month when Energy Minister Jeff Radebe signed renewable energy contracts with independent power producers (IPPs) keen to spend at least R56bn on new wind and solar power plants - and create an estimated 58 000 new and sustainable jobs in the process.
Of course the IPPs are not doing this for nothing. They are looking at making healthy returns over the next few years as SA's rebooted economy continues to grow - as are many other companies and affluent individuals, especially now that SA has avoided "junk" investment status and is set to become the gateway to the Africa Free Trade Union - a single trading bloc with an estimated 1,2bn consumers and a combined GDP of approximately R24-trillion.
And the good news is that ordinary SA consumers can catch this rising tide too, even if they don't have billions to invest, simply by buying their own homes and watching the value grow. Property ownership has proven to be the cornerstone of private wealth creation worldwide, and affordability among South Africans is currently increasing due to low inflation, declining debt levels and interest rates, and the fact that the banks are keen to advance new home loans.
At the same time, new home buyers will be able to take pride in doing their own "bit" to boost economic growth and job creation. Housing is after all one of the biggest employment generators, if one considers the spin-offs in terms of construction, infrastructure provision and the manufacture of furniture, appliances and other household goods as well as building supplies like bricks and cement.
Home ownership is thus also the start of a "virtuous circle", with more jobs leading to more housing demand, and more demand leading to the creation of even more jobs, and so on. Consequently, it is one of the most important keys to unlocking the promise of SA's renewed growth for the benefit of its own citizens, and should be encouraged by all means.
Author: Gerhard Kotze
