RYK VAN NIEKERK: Dr Roelof Botha joins me now. He is of course the well-known economist. He’s an economic advisor to the Optimum Group, and he also teaches economics at Gibs . He also compiles the Altron Fintech Household Resilience Index, and this index has shown that there [was] a good recovery in most economic sectors in the fourth quarter of last year. The index shed light on the financial health of South African households in general, and their ability to cope with debt.
Obviously there is an improvement over the second quarter of 2020. That was the first Covid quarter, and in that quarter you could have been arrested. I was almost arrested [when] just running on my lawn on the outside of my house. It was frightening. If you are by law not allowed to open your business, then you can imagine what happens.
Unfortunately, I personally believe that if we had a more accurate figure for the total informal-sector employment in South Africa, then this index would have had a slightly better showing, if not a moderately better showing. But just lastly, one of the significant changes between 2020 and today is interest rates. We saw a significant decline of interest rates shortly after the lockdown started, and now we are entering a new upward interest-rate cycle. Do you think that will have a significant impact on consumers going forward?
That is the main reason by a long shot – and how they figure the causality for that one is beyond me. Once there is peace in Ukraine – and that’s around the corner with a bit of luck, I think we are hoping and praying for that – the Russians will have no option but to pump oil like it’s going out of fashion; they’ve got no forex left. The oil price will hopefully within a couple of months from now come tumbling down, and so will our inflation trend. So it’s a knee-jerk reaction.
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