Firms cling to cash amid high policy uncertainty, say academics
Holding on to funds not an investor strike but rather a barometer of reaction to excessive insecurity levels, say Raymond Parsons and Waldo Krugell
Prolonged policy uncertainty, whether it be lack of clarity on land reform or the end state of the electricity market, has left SA’s corporates sitting on pent-up cash.
Data from the SA Reserve Bank showed that by July, SA’s private non-financial corporates held more than R1-trillion. This comes as fixed investment in the economy has declined to historical lows, slumping below the levels considered necessary to boost economic growth...