Charles Russon, CEO of Absa, stresses the importance of macroeconomic consistency for South African growth during an interview. The upcoming budget presentation is critical for investment stability as South Africa has experienced low growth in recent years. Additionally, Absa plans to expand into Dubai to leverage trade with the Middle East.
Charles Russon, the interim Chief Executive Officer of Absa Group Ltd., emphasized the necessity for South Africa’s policymakers to ensure macroeconomic consistency to stimulate economic growth. In a recent interview with Bloomberg TV, he outlined that investors are seeking both policy and fiscal certainty, as these elements foster a conducive environment for growth.
The forthcoming budget presentation by Finance Minister Enoch Godongwana is crucial, especially after a previous attempt failed. This situation raises concerns over future investments if the budget is not accepted, particularly in light of South Africa’s economy, which has seen minimal growth of less than 1% annually for the past decade, primarily due to governmental issues.
Russon highlighted that the budget must focus on reducing debt and curbing unnecessary expenditures while demonstrating responsible fiscal management. With potential growth projections of 2% in the upcoming years, the budget’s outcome is pivotal for cultivating investor confidence and stability.
In addition to budget discussions, Russon revealed plans for Absa to establish an office in Dubai. This move aligns with the bank’s strategy to engage with Africa’s increasing trade and investment activities with the Middle East, particularly as Gulf countries diversify their economic investments towards Africa.
The expansion into Dubai would set Absa in competition with other financial institutions, such as Investec Ltd., which opened an office last year, and Standard Bank Group Ltd., which aims to expand its presence in Egypt. This demonstrates the growing economic linkages between Africa and the Middle East.
In summary, Charles Russon of Absa underscores the critical need for policy certainty in South Africa to facilitate economic growth. As the government prepares for a significant budget presentation, its focus must remain on fiscal responsibility and reducing expenditures. Additionally, Absa’s plans to expand into Dubai reflect a strategic move to enhance Africa’s connectivity with global markets, particularly given the increasing investment from the Middle East.
Original Source: financialpost.com
