South Africa Inc
South Africa Inc

South Africa INC

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We’ve all got a trick to end the blues. Mine is remembering the part of movies, writes celebrated journalist, Alec Hogg. Like a scene from Road Trip where the lads congratulate themselves for vaulting over a crumbling bridge - just before their car falls apart. That lifts my darkest mood. Corny perhaps. But for me, it’s a treasure.

My own road trip this week had its bright moments. Not quite of the movie kind, but when ace money manager Wayne McCurrie gets going, he’ll even get a Prussian corporal to chuckle. Over the past few days, I joined McCurrie and some colleagues from Momentum Investments as they introduced their new business to financial advisors. They gave me the podium for 30 minutes with and open brief, which provided an opportunity to invest time in researching something close to my heart. A long-held feeling that South Africa is the real “Lucky Country”.

One of the main reasons stems from an unsung national hero, former banking registrar Errol Kruger. His strict controls kept SA banks away from a lending party. One so wild that fixing it has mortgaged the West’s next generation. Recently retired, Kruger received another anonymous honour in last week’s 2011/2012 Global Competiveness Report. The World Economic Forum data ranks South Africa’s banks the second most sound in the world, shaded only by Canada. The most popular SA emigration destination, the United Kingdom, is near the back at 111; and Ireland comes stone last of the 142 countries surveyed. Without putting too fine a point on it, unless your banks are sound, your economy can’t grow. Listen up, “Team Homecoming Revolution”.

And then there’s economic growth. My research ahead of the road trip threw up a big surprise. For each of the past 11 years, South Africa’s economy has grown faster than the two nations we look to for leadership - the United States and the UK. A couple of years can be an aberration. But not 11 in a row. That’s called a trend. Proof, too, for false prophets who still preach about an “overvalued” rand, and warn of an imminent currency crash. They’re just plain wrong. Apart from its superior growth rate, SA’s national balance sheet is one of the strongest in the world. With a national debt ratio half that of the best number of the European Union.

But the real reason for the “Lucky Country” tag is, as McCurrie put it on our travels, because “China is our china”. SA’s economic growth rate is now strongly correlated to China’s. And if there is one country you’d bet on continuing to thrive no matter what, it’s the Middle Kingdom. And to confirm the new-best-friend (NFB) status, it was China that invited SA to join the world’s most exclusive club, the newly renamed Brics (Brazil, Russia, India, China, South Africa). So we may ask the Aussies, which is the real Lucky Country?

Other accolades come from a Business Report preview, by Humphrey Borkum, of the annual meeting of the World Federation of (Stock) Exchanges, to be hosted by South Africa shortly.

In the latest Global Competitiveness Report of the World Economic Forum, the JSE was once again placed first in terms of market regulation and we have now moved from seventh to fourth in the provision of equity market finance. Our highly rated accountancy firms repeated their first place in strength of auditing and reporting standards. I always remind myself that this is South Africa Inc competing with 138 other countries and the comparison is not merely against developing countries but against the top developed countries. Congratulations are due to all concerned and to the financial departments of the Government.

Extracts from The Weekend Witness and The Mercury Business Report