Nedbank CEO Mike Brown blasts ruining of SA’s economy
The Nedbank CEO says Zuma's shock reshuffle had been a snub to the partnership work of business, the government and labour
Nedbank CEO Mike Brown has joined a growing chorus of business leaders who are speaking out against government’s mismanagement of the economy and the incompetence and corruption in management of certain state-owned enterprises.
These were negatively affecting confidence, investment, economic growth and job creation, Brown said.
The country’s third-largest bank by assets has revised its full-year outlook downwards as the economy slows, partly as a result of these issues.
Nedbank experienced slower revenue growth for the first half of the year as SA slipped into recession in the first quarter, coupled with rising unemployment, which placed consumers under pressure and slowed the growth of loans and the number of transactions.
Half of the group’s key performance targets — including return on equity and diluted headline earnings per share — are not expected to be met this year due to the economic outlook, which was worsened by the March 31 cabinet reshuffle.
Brown said the reshuffle had been a snub to the partnership work of business, the government and labour, undoing much of the work undertaken by the CEO Initiative to avert a downgrade in SA’s credit rating.
"Effectively, if you read the ratings agency reports, they say the reshuffle caused the downgrade," he said after the release of the group’s results for the six months to June.
Brown is the third high-level business leader to express frustration with government decisions and their effect on business this week. It comes after Royal Bafokeng Platinum CEO Steve Phiri said "monotonously regular" news about corruption and wrongdoing by the government was compelling investors to think twice before investing in his industry. Later, Sygnia CEO Magda Wierzycka said government corruption affected the economy, not just taxpayers.
Brown is a member of the CEO Initiative, which had been working with former finance minister Pravin Gordhan and other government officials to avert downgrades by Fitch, Moody’s and S&P Global Ratings, which came almost immediately after the reshuffle, when Gordhan and his deputy, Mcebisi Jonas, were removed. The group is still working on avoiding a descent deeper into junk territory — particularly in respect of the local currency ratings. "What we’re trying to do is work with business, government and labour to grow the economy on an inclusive basis.
"We are resetting our working relationship to once again work together for the benefit of all South Africans and initiatives like the SME Fund and the youth employment scheme continue.
"In all of the political and policy uncertainty we are experiencing, we have got to make sure we don’t lose focus on the economy and jobs," Brown said.