Volatility of Rand Needs to Be Fixed: Coleman

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Nov. 18 (Bloomberg) -- Colin Coleman, Head of South Africa Office at Goldman Sachs, discusses the economic outlook for South Africa and impact Federal Reserve tapering may have on the country. He speaks on Bloomberg Television's “The Pulse.” (Source: Bloomberg)

Take a step act, look at what has been done since the early 90's. the progress has been significant.

The facts tell you when you take a comparative view of the last 20 years, we have gone from a bankrupt economy in 1994 when nelson mandela took the presidency to an economy that has tripled in size.

Gdp per capita has gone up 40%. inflation has have.

A tremendous monetary story has taken place over the past 20 years.

There are ongoing problems of unemployment, health and education that haven't significantly enough moved structurally over those 20 years.

That is really the challenge moving forward.

Dealing with those structural things in the economy.

Education, trying to get productivity levels to rise a little.

Despite the progress you are talking about, you kind of still get the sense it isn't living up to potential.

The good news is exactly that.

There is low hanging fruit.

Proper management in the state, the right kind of investments currently being made.

With basic management decisions being taken and i think we can get a much greater output.

The more difficult issues are unemployment issues where that is going to take a much more concerted all-around effort across society to get productivity to outstrip wages, to get the economy to value over the period.

How big a problem is the fed going to be for those guys?

They try to think about how to manage the story going forward here.

The rally has been spectacular.

You get the sense that we are not done yet.

We all know about the budget deficit.

Last week, the south african government restated the trade numbers.

They rallied a little bit.

I think that current account deficit which is roughly 5% of gdp we think or around $20 billion every year has to be funded more through higher- quality funding such as foreign direct investment.

We say in the report that the historic $2 billion should be lifted to more like $5 billion to $10 billion.

I believe that the cabinet which has welcomed this report is fully aware of the need to increase the foreign investment into the economy and is going to be much more concerted effort to make that take place.

The tensions in society are still absolutely massive.

From all the stories we have had coming out of the mining sector, there is clearly again a tension that exists there.

How big -- is that something the government can stop?

You talk about the unemployment numbers, the structural reform.

There is a tension that lies at the heart of south africa still.


14 million people are working.

7 million people are not.

Roughly 36% of people who want to work cannot.

It is a significant racial disparity.

The tensions in society in my lifetime -- and i am a south african, lived there my whole life -- have dissipated significantly.

If you look back at 94, we were at the edge of an apocalypse in south africa.

The potential for violence change which turned out through the common efforts of south africans to the aps will change.

Now, we have different problems.

Poverty and racial inequality persists and we have to buckle down and deal with that.

That requires labor, government, and it requires business to have a concerted joint effort.

Last question -- it used to be that south africa was an anomaly in the continent.

It was investable where is the rest of the continent largely wasn't. that has changed dramatically.

Why in new york or london or beijing, why am i looking at africa?

South africa is a large part of the total capital markets.

The only place to treat african stocks is through the south african equity merck its.

-- markets.

Sub-saharan africa growing at 5.5% relative to africa's murrell three percent is like a turbocharged engine inside south africa's stable economy.

Pleasure seeing you.

Thanks very much.

Francine, but of company news from you now.

Let's start with belka,. the phone company has installed interim leadership.

It is reported that the official was speaking to a small child.

A billionaire's group is said to have reached an agreement to buy stake in oral cali.

-- uralkali,

This text has been automatically generated. It may not be 100% accurate.


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