Sharp increase in credit impairments amidst ongoing economic gloom

ABSA’s latest trading update does not make pleasant reading. The lender expects a sharp increase in credit impairments amidst ongoing economic gloom. Consumers are battling to cope with inflationary pressures, sandwiched uncomfortably between rising costs and interest rates. All indications are that a rates decrease is still a long way off. In addition the brief respite from load shedding appears to be over, while arson attacks on trucks are ominously familiar, particularly coming on the two-year anniversary of the KwaZulu-Natal unrest.

Our current predicament brings to mind the words of Moeletsi Mbeki who shared his views at a recent Chamber event. Our economic woes are likely to continue, Mbeki says, unless somebody does something to address them -- and by ‘somebody’ Mbeki doesn’t mean some anonymous government functionary in a work cubicle in Pretoria or Cape Town; he means you and I in the private sector, the men and women who underpin economic activity, whose taxes pay Government salaries.

Fortunately South Africa is still well endowed with business acumen. From Atlantis comes news of a trailblazing renewable energy partnership that offers a blueprint for future action in the energy space. Atlantis Foundries (AF), one of Africa’s largest foundry operations, has signed a long-term Power Purchase Agreement with integrated energy solutions company Energy Partners. The deal involves installation of 20 000 solar panels which will significantly reduce AF’s electricity consumption and carbon footprint. It will also contribute to Cape Town’s overall renewable energy capacity and assist with load shedding curtailment. Together with City stakeholders the two companies have successfully navigated a minefield of technical and regulatory obstacles to create a new benchmark. It is great news for Atlantis and great news for South Africa, a significant investment motivated partly by a long-term commitment to doing business. We applaud all partners in this groundbreaking initiative in the hope of seeing similar investments in the near future. 

John Lawson
CEO of the Cape Chamber of Commerce & Industry