In a world connected by technology and governed by societies open to talks about almost anything, it has become increasingly difficult to remain completely unaware of what’s happening in business, politics and the economic environment.
You hear about it on your way to work, while listening to the radio; during your lunch break, whilst standing at the water dispenser; as you walk out of that lecture hall or class room; as you log onto your social media accounts, view WhatsApp status updates, Facebook posts and the works. Someone mentions something about what the President has said, what the CEO of that big firm is being accused of or that compromising business relationship that has been on the news lately, or something along those lines.
If you’re anything like the clear majority of Homo sapiens (humans), then you’ll simply go on with your own business. A few moments later, you will have placed it at the back of your mind and not have a care in the world as to what was said, it might not bother you much, but reality is, it affects you and your bank account in one way or the other.
In recent times, the performance of our currency has largely been affected by the political atmosphere created by our ruling party along with several opposition parties. Their statements and actions have often been attributable to the extreme fluctuations in the Rand value. We generally don’t feel its effect, not directly anyway, but reality is, a weaker rand has various financial implications. One, for example, being an increase in the cost of importing. This wouldn’t be much of an issue if we weren’t importing goods worth approximately R17,7 million monthly. This means that part of the costs incurred in producing a considerable amount of the goods you consume is attributable to inflated import costs due to the weaker rand. This entails a higher selling price, therefore, a higher spending price, and ultimately less money in your wallet.
Business scandals also tend to affect the public, often without us being cognizant of it.
Take the Steinhoff saga, for example. This is a large furniture company and multinational retailer, which had a falling out in December 2017. Its share price came crashing down after CEO Markus Jooster handed in his resignation letter, stating that he had made “some big mistakes”. It was later discovered that the company had various financial reporting irregularities dating back several years. This cost the Government Employee Pension Fund (GEPF) about R 20 billion that it had invested in the company.
That’s R20 billion lost in government revenue, employee’s salaries and tax payer’s income. That money needs to be recovered somehow, it might not be taken directly from our pockets, but in one way or the other, the average South African will pay.
The above mentioned are only 2 of many cases where political and business actions have affected the financial standing of the ordinary citizen. We are, unfortunately, in no position to change the performance of conglomerates and behaviour of our leaders. We can, however, deal with how they affect us, by becoming aware of what’s happening, adapting our lifestyles and budgeting accordingly.
So next time you hear about that political scandal or business saga, take a moment to engage in the conversation, find out more if need be, talk about the financial implications it may have on the business, economy and you, as a member of society.
Get into the habit of reading financial articles. Websites such as Fin24, Business Day, Moneyweb and the Daily Maverick, amongst many others, tend to offer interesting reads. Not only does this make you more aware of what’s happening in the world around you, but it expands your mind, increases your knowledge, and enables you to best plan for any potentially impoverishing situations that may arise in the economy.