2. Structural Adjustments in the South African Economy Presented by: Dawie Roodt 22 May

3. Contents  Fiscal Policy  Monetary Policy  Balance of Payments  Economic Growth  Employment  Africa and Us  Asset allocation

4. Fiscal Policy

5. State Finances

6. Almost Zero

7. State Finances

8. Results  Lower interest payments  More social expenditure  Better ratings  Strong demand

9. Monetary Policy

10. Rand Valuation Gold $800 Rubicon Stock exchange crash ANC, Reds fall Election Exchange controls Asian crises Wakefordgate Rus, Zim, Arg Fin Rand NOFP + NOFP -

11. Inflation

12. Interest rates

13. Results  Interest rate stability  Better business environment  Lower cost of capital  Strong demand

14. Balance of Payments

18. Results  Access to international capital  World integration  International competitive

19. Real Economy

20. GDP Components

21. GDP

25. Results  Job creation  Increased prosperity

26. Labour

28. 2005 SA formal employment growth of 4.5% (best in years!) SA economy need to grow: –6.5% to halve narrow unemployment by 2014 –9.3% to halve broad unemployment by 2014 Narrow definition: 4.25m unemployed To halve this number by 2014: –240 000 jobs per year To generate 1% employment growth SA needs: –2006: 2.3% GDP growth –1980’s: 1.6% GDP growth

29. Labour

32. Results  Higher productivity  Lower burden on state

33. A comparison

34. 4% of African area 23% of African GDP 21.2% of African Exports

35. AIDS Source: UNAIDS

36. GDP Source: UN

37. Countries Compared to Provinces Source: UN

38. Mistakes made in Africa Idolise Leaders Marketing Boards Nepotism Incompetence Corruption Poor Fiscal Discipline Too Relaxed Monetary Policy Unrealistic Projects ????????

39. Local Equities Allocation, 2006

40. www.efgroup.co.za