South Africans are facing a cold, dark time. My South African friends know that this is literal – our homes are dark and cold unless you are one of the fortunate ones who have had resources to go off grid. But it is also a dark time in our economy. Economic growth has disappeared. Inflation remains stubbornly high. Unemployment is rising to even more alarming rates. Interest rates are rising partly because the currency is weakening at an alarming rate against most other currencies. All while our government is dilly-dallying about their position on Russia’s invasion of the Ukraine.
I’ve described a cocktail of economic woes which would darken anyone’s mood, if not affect their pockets. I have noticed, however, that my fellow South Africans always seem particularly downbeat when the Rand spikes, seemingly out of control. It’s as if we make a direct link to the currency as an indicator of our financial wellbeing, and even our own wellbeing. Of course, the Rand is not a good indicator of our financial or even the country’s wellbeing. Tying our mood to one of the most volatile currencies, is a bad idea!
The Rand has periods of extreme weakness, but history tells us that it is generally followed by long periods of retracement. I would not bet on the current weakening trend to continue indefinitely. A good example is that the Rand vs. the Pound is nearing levels already reached after Nenegate, eight years ago.
Extrapolating severely negative trends indefinitely, into the future, is dangerous in general. If we merely extrapolate the current negative sentiment - particularly the constraining power situation -into the future, we will ignore the magic of human adaptability and invention. “Necessity is the mother of invention,” really is true.
The Second World War sparked and advanced the invention and use of radar, penicillin, jet engines and duct tape. Even the first computer was invented during that time to help decipher the coded messages sent by the enemy. The Afrikaners resorted to a new form of war, guerrilla warfare, against the mighty British Army when surrender was not an option. When the pressure is on, people do not just endure, they invent.
Similarly, the local power crisis is quietly leading to an energy revolution. Most energy experts now predict that renewable energy sources will fill the gap left by Eskom’s capacity constraints by the end of 2024. South Africans are in a league of their own when it comes to adapting. We are resilient and creative when we put our minds to it. ‘n Boer maak ‘n plan! (a farmer makes a plan), is true of all South Africans, not only the Afrikaans farmer.
It would be lovely if our government had a Damascus moment, but it is highly unlikely. However, we also cannot just extrapolate the current reality without understanding what is being done, not by government but by the inventive, creative, and resilient people of this country. You must look beyond the trend to the force of invention working against it before you make your final judgement.