Trade with the East is key to growth - economist

More trade with the East is where South Africa’s real economic growth engine lies, says Dawie Roodt, chief economist for the Efficient Group. “By the end of this year the emerging economies as a group will be bigger than the industrialised economies and we are a part of that emerging group. Think about it logically,” he said recently, “we have 1.5 billion Chinese on the planet. If they are going to eat one chicken a week just how many farms do you need to deliver that quantity? This is where the real opportunities lie – in closer trade with this massive growing market.” Roodt said he believed South Africa’s interest rates at present were too low and that the current situation was not sustainable. “I am not saying that the interest rate must go up immediately, in fact, I advocate that the Reserve Bank sits tight for the moment, but we should see it start to increase early next year. So if you want to borrow money for capital investments in your business, now is the time to do so as money has never been this cheap in 30 years.” Roodt said that while the outlook for South Africa’s economy was not one of major growth in the next few years, there was still much more optimism about the local market than many other economies in the world. “Incomes are increasing faster than ever before and balance sheets are looking better. Yes, we have seen huge increases in the price of petrol, electricity and food, but we are nowhere near a Greece.” Growth in trade with emerging markets is a recurrent theme in the strategic plans of many of the groupage operators featured in this special supplement. While the East remains a strong area of focus, overborder trade also continues to show significant growth for many.