Following something of a twitter spat on Friday, Coenraad Bezuidenhout and I were invited to debate our opposing views of the rand on Summit TV.
Coenraad Bezuidenhout is Executive Director of the Manufacturing Circle, which has been advocating for a weak rand (or “competitive” – essentially a weaker rand) in the past as one way to benefit the sector and help it get out of the doldrums.
I have always maintained that a weak rand is anathema to savings led investment in SA, as it fuels consumption at the cost of savings. Because we are not generating enough savings in SA, local supply chains are shrinking as the resources aren’t freed up to start these businesses to serve the manufacturing industry, never mind growing the existing sector. To grow manufacturing in SA we need higher real interest rates and a strengthening rand to incentivise real and sustainable savings-led investment in the sector.
Here is the discussion that was aired live on Summit TV last night (June 4, 2013).