Growing sense of deja vu over South Africa market prospects

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South Africa is once more basking in a sense of early year optimism but it remains to be seen whether positive campaign promises come to fruition or if it is to be same old story.

Ministers in South Africa are making all the right sounds regarding a market comeback. Plans to revive the struggling economy are reportedly in place and all manner of projects are underway to increase tourism spend, but in election season whether these are anything more than campaign promises remains to be seen.
The year gone was one of two halfs for South Africa’s gaming market. A glut of expectant financial ratings and a government assertions all helped nurture a sense of positivity but this was soon curtailed by international downgrades, internal crises and sluggish economic progress.
The story appears to be repeating itself in 2019 with a number of governmental officials positing plans for revival – conveniently in time for election season.
Whilst the National Treasury this month revised the nation’s growth expectation down from 1.7 percent to 1.5 such is reportedly a precursor for steadier, more measured growth in the years to come.
“The weaker outlook projects a slow improvement in production and employment following poor investment growth in 2018, and a moderation in global trade and investment,” read the Budget Review document. “The medium-term outlook is subdued, with GDP growth projected to reach 2.1 per-cent in 2021, supported by a gradual improvement in confidence, more effective public infrastructure spending, and a better commodity price outlook than previously assumed.”
President Cyril Ramaphosa himself used his state of the union address to claim that plans were in place to remove obstacles for investors, attract more tourism and legitimise economic activity, although he was light on specifics. It would seem sensible therefore that the true extent of this roadmap will only come to light should the African National Congress (ANC) win out – as it is expected to do so- on 9 May.
Meanwhile critical tourism numbers have been projected to suffer a small decline in the coming year with the lasting impact of the drought crisis colouring a number of media narratives and VISA issues curtailing inter-African travel. However, speaking at a recent conference South African Minister of Tourism Derek Hanekom struck a similar tone of non-specific optimism as his colleagues in the ANC.
“We are in robust conversation with the Department of Home Affairs regarding visa regulations. We want to make it easier for people to attain visas to visit South Africa,” he said.
The Tourism Business Council of South Africa CEO Tshifhiwa Tshivhengwa further called on the government to assist the sector in reaching the lofty goal of doubling arrivals to 21m by 2030.
“We are projecting huge investment into the tourism industry in order to meet our 2030 tourism goal. This includes the private sector where hotel groups are investing heavily in Africa. We discussed visa waivers with government for ear-marked countries to promote tourism,” said Tshivhenga.
The true scope of the whole affair will only become clear with time but if those in power are to stick to their word the market could well move from bust to boom, but then again, it’s all been said before.

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