January 13th, 2024 | Business, Economics, Practice

Economy and business



  • The UN says that our estimated growth for this year will be only 0.5%. Interestingly, it warns against debt sustainability, with 18 African countries recording debt-to-GDP ratios of over 70% – we are there!
  • Inflation: our inflation edged up in the fourth quarter; our neighbour boasts Africa’s highest interest rate, steady at 130%!
  • Our construction sector seems to have turned the corner and things are looking up. SANRAL’s intended spend on the roads (despite its EE flip-flops) should boost this turnaround.
  • New capital investment has been up for some months.
  • The downtrend in our business cycle indicator would appear to have stabilised and one hopes that this and the expected turnaround in interest rates will stimulate business.
  • The ABSA PMI edged into marginally positive territory during December. In sympathy, the BER’s Retailer Business Confidence rose in the fourth quarter and is now only marginally negative. Similarly, producer inflation has decelerated.
  • On the negative side, new vehicle sales, an indicator of economic health, was sharply down, reflective of the worst retail Christmas sales in 20 years. Eskom announced that loadshedding had cost us 1.5 million jobs last year.
  • Exacerbating our worsening capital investment trend, is France, our second largest trading partner within the EU, announcing that it would hold off capital investments in South Africa pending urgent financial reforms by our government. This sentiment is reinforced by Rupert publicly stating that we can no longer attract FDI amidst failing infrastructure, lawlessness and the lack of consequences for corruption.
  • As an aside, investment in our stocks, in sympathy with emerging markets, has been waning for the past eight years with R990bn allegedly having been lost to the JSE. This is understandable, given the poor relative performance of our economy:

“While the S&P 500 returned a phenomenal 26% year-to-date years (35% in rand terms), the JSE All Share returned about -0.4% in USD and around 7% in ZAR.”

  • Hope? Yes, tempered by the understanding that what our government says and does have very little in common: there are reports that our government and business are talking about plans to grow our economy by 6% on the back of infrastructure restoration. So, where will the funds come from? Our state is facing an income deficit of some R347bn, up by more than 40% over last year. This shortfall places pressure on our Treasury to withdraw a part of its contingency reserve – intended as a bulwark against exogenous shocks, rather than as a top up of government over-indulgence.


News to watch:

  • You will be heartened to know that Mr Gordhan has reassured us there had been no political interference with SOEs…
  • Developing from our electricity saga, is news that business solar installations doubled to 5GW last year, leading to de Ruyter stating that Eskom (and municipalities?) may well be left with mainly non-paying customers. Even more interesting, is news that NERSA has been taken to task (court!) for failing to ensure that the Rustenburg municipality adheres to its electricity supply licence conditions. This is going to be fun.
  • Potholes: a year after launching Operation Vala Zonke, an app that allows individuals to report the location of potholes, is news that the system cannot be utilised properly owing to a lack of training of staff and underspending. The usual – great idea but little implementation.
  • BIG: a paper on the effect of the introduction of such a scheme may be read at https://onlinelibrary.wiley.com/doi/10.1111/saje.12363
  • Preferential procurement: contrary to what you may have thought, Patel says that the government’s PP policies have helped to lean against de-industrialisation pressures…
  • Kudos: Discovery Bank has been rated first in the Public Net Sentiment stakes. FlySafair is the most on-time low-cost carrier worldwide.
  • Dreams: the Prez has announced that the state will proceed with planning a high-speed rail network between Pretoria to Durban and Komatipoort as well as Polokwane to Musina (really?). And, lastly, the Rand manipulation case against banks has collapsed and was described by a Wits professor as political “huff and puff”.



  • SARS has introduced a VAT estimated assessment for taxpayers who do not respond timeously to requests for supporting material. Be careful.
  • How does one restore a financially distressed company to solvency? H
  • The CIPC has introduced a process for electronic director amendments of companies.
  • Employers have until 15 January to lodge their annual EE reports to the Department of Labour.
  • The Prez has asked business to delay income deficit led retrenchments, pending measurable progress in energy and logistics…his faith in implementation is touching.
  • On the topic of productivity, the following snippet may interest you: https://codera.co.za/cultural-values-and-productivity/





Also https://www.saflii.org/za/cases/ZAKZPHC/2023/153.html

  • The BLA had sought to take on Eskom, alleging bias in appointing law firms on a three-year legal services tender issued a year-and-a-half ago. That institution is now being sued by its own lawyers for non-payment of their accounts.









  • Residential rental growth was up 4.6% yoy in November, the highest growth rate since 2017. Vacancy rates in the sector stood at a six-year low.
  • The residential property market was down much of last year and transfers declined by some 30% by year-end.
  • The office rental vacancy rate at Q4 was 15.2%, with office space rentals in the doldrums. This trend is a boon for those entities doing office-to-residential conversions. At the same time, BusinessDay reported that top-quality office space was in demand owing to the reversal of remote work.
  • Logistics rental space stand at historically low vacancy rates – Fortress reported a 0.5% vacancy rate at year end!
  • Trading volumes in malls decelerated somewhat at the end of last year. Rhode’s following graph says it all:
  • As was said above – the Afrimat Construction Index was up, as was sales of building materials, possibly heralding a reversal in property fortunes.
  • Old Mutual predicted that listed property stocks should pick up.


Cherry picks and local news:

  • Nelson Mandela Bay has authorised the redevelopment of the Oceanarium and Happy Valley areas into a new scheme termed the Bayworld Programme.
  • Whichever way one cuts this, Gauteng is still our national powerhouse, with vacancy rates coming down and rentals, especially in prime locations, picking up.
  • Much was said of semigration last year – the latest is reverse immigration (of expats) which is said to be boosting residential sales in our major cities.
  • The Southern Farms Biodiversity Development Project, South of Johannesburg will cost some R27bn and will provide some 45,000 housing units and additional facilities.
  • Two major shopping malls in Gauteng are the Newmarket Lifestyle Centre, situated on the old Newmarket racecourse and the Lenz Quarter in Lenasia.
  • The KZN’s North Coast development is picking up and average residential prices are reported to be almost 50% higher than elsewhere in the area, with within-estate-sales between 144 and 190% more than those on the adjacent coastline.


If this leads you to want to buy a property – consider the following:


It is not often that one sees a totally new take on an old topic: act 70/70 prohibits the subdivision of agricultural land without ministerial consent. If you lease only the arable portions of a farm, does this contravene the act? Take a look: https://stbb.co.za/wp-content/uploads/2024/01/stbb_plu01-2024_s2.pdf




Two issues deserve mention:

  • The usual spate of deaths of many young men, attending summer initiation schools, was again reported on; in fact, I encountered only one report on this topic recently. Imagine that at any other event such deaths would occur –an uproar would result with ministerial investigations et cetera? Are such deaths more acceptable because such initiations are part of African custom or, dare one say this, Africans don’t care?
  • This you have to absolutely love: Nummawan announced that the new MK party will have zero tolerance for corruption!


We all wish each other well for the New Year. So, what does happiness entail and how does one achieve this? The longest study ever conducted on human happiness, was done via Harvard and revealed the following:

  • Cultivate close relationships;
  • Cultivate friendships;
  • Cultivate a satisfying marriage; and
  • Take care of your body.


Lighten up

On legal happiness and progress:

  • How do you get a group of personal injury lawyers to smile for a picture?

Just say, “Fees!” –


Written by: Daan Steenkamp

Daan Steenkamp Attorneys



Still looking for your dream home, or wanting to sell? Feel free to give one of our developers a call today.


Tom Eastwick – The Gates, Hilton and Garlington, Hilton | 072 297 2699 | tom@devdirect.co.za
Janet Channing – Waterford Residential Estate, Howick | 082 570 5834 | janet@devdirect.co.za


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