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Ross Breedt of PSG comments on South Africa |
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Ross Breedt on South Africa
Ross Breedt, Chief Executive Officer of PSG Fund Management
The old South African tongue in cheek saying of “Africa is a tough country” always rings so true for me. I was in the fortunate position to go and take a look at the bottling operation at High Constantia’s (Wine Maker: David Van Niekerk) when they bottled their 2008 Sauvignon Blanc a few days ago and its always so fulfilling to see a professional talk with such passion about their product and the bounties that South Africa has given them and their family. The High Constantia wine is truly unique (try the Sabastiaan you will not regret it – available at the Dorchester in London but at a price somewhat higher than what you can get it at the farm) and is sold to a focused and connosuring market, pretty much like our products at PSG Fund Management, our clients tend to be focused investors who are in it for the long term and for very specific investment objectives. Just tasting this freshly bottled Sauvignon Blanc had me uttering with a grin “Hell, its tough here in Africa!”
And yes, I hear folk around me making comments as to whether South Africa is not just another Zimbabwe in the making and I firmly believe that we are not, and there are some prudent factors attesting to this, namely;
- Zim’s destruction of basic principles of democracy.
- Zim ignores private property rights,
- Zim undermined the economy,
- Inflation at 11, 200, 000% (and changing)
- Zim destroyed their independent central bank,
- Zim banned freedom of press
- Zim destroyed its independent judiciary system
- Zim destroyed its (the) democratic process
- South Africa is responsible for
- 4% of Africa area,
- 23% of African GDP,
- 22% of African exports,
- 20% of Africa imports
- SA’s economic strength comes from the following:
- 20.6% Financial, Real estate & business services,
- 16% manufacturing,
- 14% Wholesale & retail,
- 12.4% General government services,
- 9.7% Transport & communications,
- 5.4% mining
- 5.2% personal services
- 3.5% construction
- 2.2% agriculture
Yes, we have got our issues facing us, economically and politically, but who hasn’t? I was recently in London and had a chance to chat to a few folk in the financial services industry, and guess what? the same problems facing us are facing them – increasing food prices, credit squeeze (very difficult to raise any credit from UK banks or lending institutions), increased fuel and energy costs, increasing vehicle costs, increasing transport costs, everything up, up, up! My colleagues in London are experiencing the same financial planning and investment placing problems that we see locally, how to manage investment expectations?
I personally always tend to look at the positives. The worst mistake anyone can make, whether in life or business, is to not always see the negative. I accept history mostly as someone’s written perspective on someone else’s real experience. For me, it is thus a guiding lesson on past mistakes and past successes. So from someone who’s forefathers set foot here shortly after Mr van Riebeeck, I am here to stay!
The reasons are simple:
- We are witness to one the best examples of a fairly easy transition from the “old way” to the “new way”.
- I am not a spectator but a player. This country is for people who want to make a difference and who will not sit idle and wait for hand outs. (The saying “the sitting duck ring a bell?”
- This is providing an exceptional environment for entrepreneurs.
- Our financial infrastructure is on par with the best in the world.
- We have the resources (all) that undoubtedly literally mean we sit on abundance of untapped opportunity.
- Success will only come with hard work – I want to work hard.
- We have a mind set to question the status quo.
- I love the fact that the our people have the right to own property.
- I love the people, the sun, the mountains, the bush, the sea, the food, the humor, the sport, etc. Why? It is in my blood and I’m sure it is contagious.
Further to my strong views on why South Africa is our home and the home of our children, we need to consider that for the first time the developing world has a larger share of world GDP than the developed world. So lets work together in ensuring a future for ourselves and our children.
Yours
Ross Breedt
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