Pursuing Lasting Progress in Emerging Markets®

Field Notes: Cape Town

On a recent research trip, I traveled to South Africa and visited the cities of Cape Town and Johannesburg. The manifold issues facing South Africa and its economy were evident in both cities. I’ve summarized several of the most pressing issues facing the nation below.

What are South African companies doing amidst this current climate?

Some companies are investing on the margin so they are ready when growth does return to South Africa, but most appear to be waiting on the sidelines.

The banks of the river have been undercut in South Africa and the structural and economic problems run deep; clever resolutions to the myriad issues facing South Africa will not be easily accomplished. The Ramaphosa administration is tackling corruption and seeking to deliver a period of economic growth that is inclusive of all South Africans. It is important to remember that President Ramaphosa does not yet have a full presidential mandate, with formal elections likely to occur sometime in early 2019. We hope he succeeds in unlocking the potential for private sector investment in the country. However, until the most divisive issues such as land expropriation and empowerment program requirements are clearly addressed, private sector investment, especially any private sector investments from abroad, will likely wait on the sidelines.

Kate Jaquet
Public art installation of rhino sculpture to raise awareness of poaching
Corporate campus
Art and flags adorn a state-owned enterprise
Central business district
Corporate headquarters
The views and information discussed in this commentary are as of the date of publication, are subject to change, and may not reflect Seafarer’s current views. The views expressed represent an assessment of market conditions at a specific point in time, are opinions only and should not be relied upon as investment advice regarding a particular investment or markets in general. Such information does not constitute a recommendation to buy or sell specific securities or investment vehicles. It should not be assumed that any investment will be profitable or will equal the performance of the portfolios or any securities or any sectors mentioned herein. The subject matter contained herein has been derived from several sources believed to be reliable and accurate at the time of compilation. Seafarer does not accept any liability for losses either direct or consequential caused by the use of this information.
  1. Source: Statistics of South Africa, Quarterly Labour Force Survey, Quarter 2, 2018.