Elections will not affect SA's response to economic crisis

Wednesday, March 11, 2009

Johannesburg - South Africa's efforts in dealing with the economic crisis will not be affected by the transition in government after the General Elections in April, says President Kgalema Motlanthe.

"The change will be within the governing party so it should not cause any ripple at all," he said on Tuesday, during a courtesy visit to the Johannesburg Stock Exchange (JSE) in Johannesburg.

President Motlanthe said South Africa would be part of global efforts to tackle the economic crisis, hence its participation in the upcoming G20 Summit to take place in London.

He said, however, that a collective effort was needed. "No country can respond to the global financial crisis in isolation. Government will work with trade unions and business to curb its most dire impact on the economy."

A 1.8 percent drop in South Africa's Gross Domestic Product has raised concerns that South Africa may fall into a technical recession.

However, the President told investors that South Africa's sound and healthy banking sector would be instrumental in ensuring economic recovery.

"South Africa's banking system will play a key role in ensuring that we come out of the global economic recession. We have what it takes to ensure we pull out of this difficult pattern," the President said.

His visit formed part of the Second Annual JSE Week which kicked off on Monday. The event includes a public exhibition to attract first time investors to the exchange as well as those looking to learn how the stock exchange works.

General Manager of Marketing and Business Development at the JSE, Noah Greenhill encouraged South Africans to invest in the JSE.

"Many South Africans believe that the stock exchange is too complicated so the aim of this exhibition is too banish this perception and to showcase different products that don't require large investment from investors."

In South Africa about 200 000 people invest on the stock exchange, in comparison to Australia where almost half of all the traders is done by the country's 5.7 million investors.

Mr Greenhill further said investing in the JSE is another form of saving and allows listed companies to grow.

As these companies grow, they employ a greater number of people which leads to further growth in South Africa's economy, and a greater demand for local goods and services.

He believes that a healthy investment environment in a country is the key ingredient to a healthy economy.

"While the current financial turmoil on the world markets may scare off potential investors, those who enter the market at this time could benefit in the long term when the market turns.

"There is still an inherent value to be found in many listed companies for those who take a long term view on investing; this may be the ideal time to purchase shares at incredibly good value," Mr Greenhill said.