Absa CEO’s message to South Africa

The chief of South Africa’s third-biggest lender said policymakers need to use Wednesday’s budget to prioritize macroeconomic consistency in order to kickstart expansion.

The key for investors is that “they want policy certainty,” Absa interim Chief Executive Officer Charles Russon said in an interview on Bloomberg TV Wednesday.

“They want fiscal certainty, and ultimately, they want an environment that is conducive to growth.” 

South African Finance Minister Enoch Godongwana will make a second attempt at presenting an acceptable budget to a fractious coalition government after an attempt last month failed, raising questions about future investment in the country if it doesn’t pass. 

The economy has expanded at less than 1% annually for the last decade, an era of government graft, mismanagement and bailouts for under-performing state companies amid weakened public finances.

Russon said the budget would need to take steps to reduce debt and wasteful expenditure and show responsible fiscal management. 

Africa’s biggest economy could expand by 2% this year, “but we do need the certainty coming out of today,” Russon said.