As South Africans started their year off under the cloud of daily loadshedding (vacillating between stages 4 and 6 at the time of writing), we find ourselves under ever-increasing pressure.

Eskom’s approved 18.6% electricity tariff hike will only make matters worse for us all, adding to the desperate pressure so many households and businesses are already feeling (despite the president’s latest attempt at intervention).

And yet, despite the overwhelming evidence of the government’s slew of destructive and ineffective policies – most of which clearly only make the crises of poverty, unemployment, and loadshedding worse, not better – the ANC remain resolutely leftist in their strategy to drive a recovery.

The irony that is often missed is that these attempts at winning back lost votes further damage an already strained economy whose recovery could be the single greatest catalyst for the party’s fortune at the ballot box.

The past number of years have tested the resilience of South Africans. Each time a poorly managed situation has morphed into a crisis, we have endured and pushed through, fighting like we were the third monkey on the ramp of Noah’s ark, and it had just started raining!

In many respects, the fight we have had over the last number of years looks set to continue – possibly easier on certain fronts, but potentially worse on others…

The analogy of the ‘third monkey’ aptly typifies the private sector in South Africa. An example is its response to the worst load-shedding on record – businesses and homes have embarked on what has been the most aggressive roll-out of rooftop solar-generation since loadshedding started 15 years ago. Maybe out of desperation, or maybe out of fear that things will get worse before they improve, the fight of the private sector is just what one would expect from the proverbial ‘third monkey’.

I have long nailed my colours to the belief that 70% to 75% of how we South Africans do and how we feel has nothing to do with ourselves, or what is happening in the country – but rather how the rest of the world is doing. And when they are doing well and feeling good, it provides a greater tailwind to local sentiment and success than anything we could do on our own.

And it is largely because of this that we do expect some improvements.

2022 left investors with very few places to hide – wherever investors looked, losses were more likely than gains: multi-decade high inflation; the sharpest rate of rising interest rates on record; softer economic growth and the risks of a recession; and geo-political uncertainty all compounded to deliver one of the most challenging years on record.

This year looks somewhat different, though – it may have a similar feeling of being on ‘Stage 4 after weeks on Stage 6’, but we expect this year will feel better than last.

While the local JSE trades above 80,000 and our bond market’s yields run near double-digits, global equity markets still trade some 20% lower than their levels of last year January. For investors, the potential for the years ahead to deliver outsized gains from these levels is difficult to ignore.

All the while, much of the interest-rate movements that contributed to last year’s pressure is behind us, and what likely lies ahead are only a few more hikes of smaller increments. This past week the SARB hiked rates by 0.25% – a significant break from the 0.75% hikes that were brought in each of the last 3 MPC meetings… the strongest signal yet that we may be nearing the peak!

On the political front, the ANC’s narrative of renewal continues to gain pace following President Ramaphosa’s re-election as head-honcho of Africa’s oldest liberation movement. While the jury is still out on whether his slate’s victory can genuinely deliver real change and a better life for all, the impetus and intention are clearly there now, when they were glaringly absent before.

All the while we have a currency that is punching well above its weight and holding its own, an inflation outlook that is moderating, and a resilient private sector – all combining to hopefully provide us with the tailwinds towards a better future.

And judging by the rhetoric surrounding Eskom, Transnet and other struggling state-owned enterprises, the government led by the proud Comrades of the ANC have run out of their long-dreamed-of socialist-road… their last resort of private-sector involvement by way of Public-Private-Partnerships (PPPs) is now a harsh reality! The private sector, as mentioned above, is already producing many Megawatts of self-installed electricity, while the port at Richards Bay (the largest coal-exporting terminal in the country) is already run by a private consortium. And there is doubtless more to come…

Just last week President Ramaphosa uttered the words, “There is not enough money in the public purse to fix Eskom…”
Read that as you wish, but I choose to see him referring to the inevitable expansion of PPPs in critical entities and the ANC reluctantly, but forcibly so, moving further away from the centre of the state. (Not a bad thing!)
And so, the list goes on…

Bill Gates once famously said, “Most people over-estimate what they can accomplish in one year, yet under-estimate what they can in ten”.

We sit here with just over a year to the next scheduled national elections. The governing party have a veritable mountain to climb in turning the tanker that is the corruption-riddled ANC to head in a different direction, or they stand to lose it all – lock, stock, and barrel.

For now, though, as we all do our bits to keep the proverbial lights on and the engine turning, it is unfortunately still up to us to fight – hopefully less than what was needed last year, but likely for a while longer.

As the world becomes smaller and more inter-connected, so too the influence and forces that drive other economies play a bigger and more impactful role in our own. A world in better shape will make the fight easier for us all as markets and economies across the world work their way back after the ‘polycrisis’ of 2022.

We certainly stand at the brink of opportunities that contribute to this – let’s make the fight count!