‘It is critical that South Africa brings its public debt under control’

RMB CEO James Formby says if the country doesnt control its debt, it will find itself in an economic quagmire.

During the second quarter of 2020 households struggle with the new economic reality of the phased lockdown restrictions , the country’s consumer confidence has dropped to its worst levels in 35 years.

Rand Merchant Bank (RMB) chief executive officer James Formby says unless South Africa finds new ways to stimulate and revive growth and manage its public debt, the country could find itself in an economic quagmire.

He joins Bongani Bingwa to chat about the economy.

We are going through a one in a hundred year event with the global pandemic however it is vital to create confidence in order to attract confidence both domestic and from foreigners.

James Formby, CEO – Rand Merchant Bank

He says when there is this kind of economic shock like the pandemic, people naturally become more cautious.

We can see that over the last few months, people have saved more than they have spent because they are worried about what the future may bring. There is lots of uncertainty about employment levels, so people are cautious.

James Formby, CEO – Rand Merchant Bank

It is critical that South Africa brings its public debt under control. The common measure to look at is the debt to GDP. A year ago we were worried about the country breaching 60%, this year we will pass 80%.

James Formby, CEO – Rand Merchant Bank

Listen below to the full conversation: