Anglican Church of Southern African

Monthly Investment Report - Retirement Fund

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February 2018

February was an eventful month on the political front. The State of Nation
Address (SONA) was postponed as the National Executive Committee
(NEC) decided to recall Jacob Zuma as the country's president. At the
eleventh hour, Jacob Zuma reluctantly resigned as the President of South
Africa, just hours before a motion of no confidence was due to be held in
the National Assembly.

On February 15th, Cyril Ramaphosa was sworn in as the new President of
South Africa. While the change in leadership was largely priced in, there
was a knee-jerk reaction which saw further strengthening in the rand post
the announcement. Local markets rallied further in the wake of the
announcement, with strong demand seen across most sectors.
Ramaphosa's maiden SONA on 16 February saw the rand touch R11.58 to
the U.S. dollar during the delivery of the speech. The president aimed to
restore investor confidence by continuing to talk tough against corruption,
highlighting the urgent need for the creation of jobs (especially among the
youth) as well as the efficient running of state-owned enterprises (SOEs).

Following the reality check that was the 2017 Medium Term Budget Policy
Statement (MTBPS), the National Budget set the country on a faster, albeit
tougher, path towards fiscal consolidation. Consolidation measures for
2018/19 are set to be achieved through tax collection totaling R36 billion.
The measures include tax changes such as the major step to increase
value-added tax (VAT) by 1% to 15%. Although expenditure cuts of R85
billion were outlined for the medium-term expenditure framework, these
were reallocated to new expenditure pressures like fee-free education (R57

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