Nedbank boss warns state: SA is running out of time and money

Nedbank boss warns state: SA is running out of time and money

- The CEO of Nedbank has warned that there may be more job losses and higher inflation in the future

- The executive, Mike Brown, says that structural reforms are needed to avoid these outcomes

- He added that more needed to be done regarding policy certainty as well

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Nedbank CEO Mike Brown has warned government that South Africa is running out of time and money.

Brown said that reforms were moving forward too slowly and there is still too much policy uncertainty, which could scare off investors. 

He says that job loses and credit downgrades are on the cards unless government takes appropriate action.

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Brown made the comments on Tuesday after Nedbank published its results for the first half of 2019, Briefly.co.za has gathered. While Brown acknowledged that there have been some positive developments regarding the economy since this year's election, he said that the outlook for the future was uncertain.

This comes after Fitch Ratings downgraded South Africa last month to just below investment grade, according to IOL, which is not promising for Ramaphosa's goal of attracting foreign investment. 

"If we are unable to [implement reforms]," Brown said, "all the hard work done on maintaining our last investment grade rating from Moody's will be in vain."

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He added that possible outcomes of another downgrade would be higher interest rates and lower growth, as well as higher unemployment. With unemployment currently standing at 29%, this is something the country can scarcely afford. 

South Africa's investment rating affects banks such as Nedbank and the other major lenders, as the banks cannot receive a rating above country's debt.

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Source: Briefly.co.za

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