Dr Azar Jammine discusses the positive impact that South Africa’s retail sector can have on the economy.
Beyond Retail 2016 was held in October 2016 in Camps Bay. The event was hosted by Business Connection and UCS Solutions. Director and chief economist at Econometrix, Dr Azar Jammine, said that retail sales grew 3% in 2016. He added that there are a number of reasons to be upbeat about the economy in South Africa, such as dissipating electricity supply constraints, lower than expected inflation, falling petrol prices that are actually lower than in 2015, commodity prices that have recovered from the lows at the beginning of last year and increased tourism into South Africa, among others.
Dr Azar said that South Africa is currently going through turbulent times, but there is growth in consumer spending. He also set the scene for the current economic climate by saying that the world’s population continues to grow at an unprecedented rate and that it is expected to reach 9 billion by 2040. Africa continues to urbanise, which equals positive long-term economic growth potential. Retailers and marketers will have to focus on addressing the changing demographic trends on the continent to answer the question of who lives where and when.
Besides the abovementioned changes, life expectancy also continues to increase, especially among women. The reduction in Aids-related deaths after the countrywide roll-out of ARVs has significantly contributed to this success.
Dr Azar added that South Africans need to “stop blaming Zuma for everything”. According to the IMF, local and global conditions are expected to improve slightly in the next couple of years and the African continent is still marked for growth.
Besides educational disparities, Dr Aza pointed out two lesser known sources of inequality. These are the impact of improved corporate governance and related factors like executives’ remuneration over that of the working class as well as global monetary policies. This creates an affluent middle-class or upper-class minority, which is something that the retail sector should also keep in mind.
Because indebtedness is still high in South Africa, Dr Azar warned against being too positive for the short-term future.
“Be sober about prospects over the coming year. Retail is undoubtedly an important prop, but we need to do more,” concluded Dr Azar.
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