No progress made on South Africa’s problems

[Nat Quinn]

Little to no progress has been made in addressing some of South Africa’s most pressing problems, including load-shedding, unemployment, and poor service delivery.

This is according to Pick n Pay chairman Gareth Ackerman, who spoke at the presentation of the retailer’s results for the first half of its 2024 financial year.

Ackerman said that none of the structural problems with the South African economy have been addressed adequately.

“When I spoke to you a year ago, I referred to several worsening problems in the macroeconomic and socio-economic spheres. Today, I am disappointed that we have seen little or no progress in addressing them,” he said.

Ackerman previously warned that  South Africa has a heightened risk of food shortages and social unrest.

“The economy is not growing at the required rate to ensure improvement in unemployment and living standards for all South Africans,” he said.

Even more worrying is that not all businesses can cover the increasing cost to stave off load-shedding, which impacts investments in the local food industry.

“Food manufacturers are not investing in their plants to the degree required to maintain adequate market supply, and this has a big impact on food security,” Ackerman said.

Another impact of regular power cuts is food waste. An estimated 45% of South Africa’s available food supply is lost or wasted annually.

“I feel compelled to caution that the entire food industry is under existential threat,” he said.

“The probability of social unrest related to food shortages and possible store closures, if blackouts get too high, is now heightened.”

He slated the government for its lack of support to improve the situation, saying there is only inaction and blaming those trying to help solve the problems.

Ackerman said the past six months from March to August “were among the most difficult South African consumers have had to endure in the recent past”.

Load-shedding reached its worst level since 2008. This has had a disproportionately negative impact on the retail industry.

Food inflation topped 14% in March, its highest level in 14 years, and the fuel price has risen by about 20% so far this year.

Interest rates also reached their highest point since 2009, thanks to 10 successive increases since the end of 2021.

“All of this has proved to be a potent cocktail that has once again put consumers under extreme financial pressure,” Ackerman said.

In short, South Africa is negotiating one of its most turbulent periods since 1994, and there is significant uncertainty about the country’s trajectory.

 

source:No progress made on South Africa’s problems – Daily Investor

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