Over the course of the pandemic we have witnessed the power of our collective efforts.


From strictly observed lockdowns, to swift action at a policy level, to collaborations between the private and public sectors in the vaccination roll-out, we have demonstrated how effective we can be when we work as a group. With the end of 2021 on the horizon, it is an opportune time to pause and reflect on the year that was, the challenges that came with it, and the victories worth celebrating.

In the face of enormous challenges, it is often difficult to keep the horizon in sight. Achieving a true economic recovery may sometimes feel like a daunting task, but as South Africans have proven time and time again, nothing is impossible. To say that SA’s resilience has been tested is, perhaps, an understatement. Not only has the country weathered the storm presented by the pandemic; we have also faced deep economic challenges, an unsettling period of civil unrest and youth unemployment that remains persistently high. Despite this, there are numerous positive signs of a reinvigorated SA economy, persistent in its own determination to overcome adversity.

The roll-out of COVID-19 vaccinations has provided a much-needed kick-start for many major economies. While many countries, particularly in the developing world, are far behind, vaccination represents an end to the pandemic. While we got off to a late start, SA has made significant progress in reaching a total of 23.5% of the population at least partially vaccinated and some 17.9% fully vaccinated. The government and the private sector have made a concerted effort in ramping up the vaccine programme to all adults across the country, which has played a significant role in its uptake.

On the policy front, the government is making consistent progress but, more importantly, sending an important message of stability to the international community. Much of what we have seen in the past few months has been aimed at stimulating economic recovery, supporting those sectors worst affected by COVID-19 and solving funding challenges in the public sector.

This reform is firmly building impetus. There are shining examples of how the country’s rule of law, systems and processes, and judiciary are working. We have a robust Constitution and there are concerted anti-corruption efforts that are entrenching accountability and positive change. Commissions of inquiry are taking root at the deepest level and, while the process will take time, it is an active contributor to positive change.

In addition to the macroeconomic narrative, the investment market is subject to a continual shuffle between debt and equity, emerging and developing markets or indeed value and growth. These factors have a significant impact on foreign flows of investment in our market. While the bond market is experiencing a period of inflows, we have seen outflows of investment in the equity market from foreign investors. However, with so many foreign investors deeply underweight SA, there is significant upside from current levels.

Many of the factors influencing our markets are driven by the unique circumstances within the country. However, we should also recognise that the trends driving the global economy are just as significant. Our markets are often influenced by events occurring thousands of kilometres away. The quantum of corporate delistings has been reported on widely in the media. Delistings typically increase when sentiment is poor and become particularly pronounced following market crashes or major economic shocks.

We are hard at work attempting to attract top foreign corporates to list on our shores. We have also undertaken numerous initiatives to support our small and mid-sized listed entities while launching an incubator to support the local SME sector.

Despite the absolute number of delistings, the JSE total market cap continues to rise. Year-to-date it is up 7.57% from R17.85 trillion to R19.2 trillion. In fact, many delistings have been for reasons that suggest value and confidence in future returns, rather than because of businesses failing. Consolidation has also been a factor in the changing face of listed entities on the JSE. There may be fewer companies, but the horizon for investment opportunities has not shrunk.

As 2021 draws to a close, our distinctive resilience may be exactly the factor that centres our economy and moves us forward. The positive signs and early progress are beginning to contribute to business and economic confidence. This is reflected in KPMG South Africa’s latest CEO Outlook 2021, in which 70% of leaders say they are confident about the local economy’s growth prospects over the next three years, with expansion and transformation high on their agenda.

As we continue to work towards a recovery, we must not lose the precious momentum gained. Our vaccination programme must gather pace; policy reform must continue; and the fight against corruption must persevere. We must also consider the sustainability of the Earth we inhabit. As world leaders grapple with finding solutions for the climate crisis, it is incumbent on corporates and every one of us to consider our role in protecting the planet’s horizon, literally.

Our new normal might be just normal now. What will determine the future is for us to begin gearing for the next normal, which should bring attendant opportunities for all.

Leila Fourie
Group Chief Executive Officer
October 2021