SEIFSA warns members to expect turbulent times ahead
SEIFSA is concerned over the recent utterances by President Trump against South Africa and the impact this will have on the metals and engineering sector.
Whilst we will have to get used to the idea that President Trump will continue to use social media and all other channels to give effect to his views and policies, what is undeniable is that by virtue of the sheer economic size of the US, what is said will have an impact on the metals and engineering sector.
A recent snap internal survey of member companies on the early-stage implications of these developments, has indicated some alarming warning signs. The US market is a critical export area for highly specialised engineering products from South Africa and similarly, there is a considerable domestic reliance on US based software systems used in the running of operations.
Economic growth
In a world where social media dominates and when something is said often enough and is believed and perception is accepted as reality, business leaders of multinationals and owner managed local companies have a duty to stand up and allay fears and reassure foreign investors that South Africa remains a safe haven for business.
SEIFSA urges government to be deliberate and decisive in cementing its position on policy certainty, key for attracting investment and stimulating economic growth. The Government of National Unity (GNU) must demonstrate its commitment to stable, consistent policies around land, ownership, transformation and fiscal prudence. This will give investors the confidence to commit to long term projects.
Consistent, deliberate messaging and actions both domestically and internationally is what is now needed to counter the narrative that we are bordering on a failed state status. Business too has an important role to play, to be the ambassadors of a vision of a reimagined South Africa full of hope and promise.
In the interim, the immediate to mid-term outlook remains far from ideal and we can at best anticipate a frayed relationship with the US. In anticipation of a constrictional cycle over the next six months, businesses will need to reevaluate their risk and mitigation measures in order to ensure that notwithstanding the turbulent times ahead, businesses and the sector can ride out the storm coming over the horizon.
