Absa CEO Charles Russon calls for macroeconomic consistency in South Africa’s budget to attract investors and promote growth, highlighting the need for fiscal certainty. With South African growth stagnant, he emphasizes the importance of reducing debt and wasteful expenditure. Absa plans expansion to Dubai to enhance Africa-Middle East trade channels, aiming to connect global investors with African markets.
Charles Russon, interim Chief Executive Officer of Absa Group Ltd., emphasized the necessity of establishing macroeconomic consistency in South Africa to stimulate growth. He highlighted that the upcoming budget should focus on providing policy certainty, which is crucial for attracting investors. According to Russon, investors are seeking an environment that promotes fiscal stability and sustainable development.
The South African Finance Minister, Enoch Godongwana, faces pressure to deliver a budget that reassures potential investors amid persistent economic challenges and previous failures to pass essential fiscal policies. With a worrying annual growth rate of less than 1% over the last decade, attributed to government corruption and mismanagement, the budget must address issues like public debt and inefficient spending, Russon noted.
Russon forecasted that South Africa could achieve a 2% growth rate this year and the next if the necessary certainty is established from current policies. He remarked that the postponement of the budget has led to increased cooperation among members of the national unity government, formed following last year’s inconclusive elections.
In addition to domestic economic issues, Russon revealed plans for Absa to establish an office in Dubai to enhance the bank’s presence and facilitate trade between Africa and the Middle East. This move aligns with a broader trend of Gulf nations investing in Africa for food security and renewable energy. Russon affirmed, “We want to connect the rest of the world to Africa and to the people who want to do business there.” Absa’s entry into Dubai will position it alongside other major banks like Investec Ltd. and Standard Bank Group Ltd., both seeking to strengthen their links with African markets.
In conclusion, Charles Russon’s commentary underscores the vital role of policy certainty in stimulating South Africa’s economic growth. The upcoming budget presents an opportunity for the government to restore investor confidence amid a backdrop of fiscal challenges. Furthermore, Absa’s expansion into Dubai signifies the bank’s commitment to leveraging relationships with the Middle East, which may enhance trade and investment opportunities across Africa.
Original Source: financialpost.com
