Dawie Roodt’s advice to people with money in South Africa

Efficient Group chief economist Dawie Roodt says that South Africans need to accept that the country is heading into some difficult times, but advises them not to panic and make rash decisions about their investments.

Instead, he said they should “sit on their hands” and wait out the storm while looking for the opportunities that always present themselves in times of chaos.

According to Roodt, South Africans are feeling uncertain and concerned about the state of the country and its position in the geopolitical mess playing out in global markets.

“A few things happened in South Africa recently that adds to this uncertainty that we’ve been experiencing for some time,” he said.

“Do we have a budget or not? Do we still have a government of national unity or not? What is happening with the Trump tariffs?”

The economist said that these questions have caused a lot of anxiety, and rightfully so. But he urged investors to keep a cool head.

The South African economy will reel from all these events, he said.

“These will all hit the economy, and economic growth will be less than previously thought. If we see 1% (in 2025) we will be quite lucky.”

During these times, there are always opportunities to make money—but there are also a lot of opportunities to lose money, he warned.

“One way of losing money is to realise your losses – if you start selling your assets now, it’s probably not the right thing to do,” Roodt said. “Rather sit this out.”

Dawie Roodt answers the big questions

Regarding worries over the passing—or potentially not passing—of the 2025 budget, Roodt said that the reality is neither here nor there.

“The acceptance of the budget doesn’t change that much. We’re talking about relatively small amounts of money,” he said.

While the R30 billion in taxes—the core of the budget debate—is a lot of money, in the bigger picture of the full budget it’s not really that much.

Instead, the dramatics in parliament and the furious debates in portfolio committees are more political posturing than anything else.

This is because the real concern with the fiscal outlook—the fact that spending has become unsustainable—is still largely unaddressed.

Roodt said that the focus on the budget is an overall positive thing, because it is forcing a much finer look at the budget and how the fiscal accounts need to be balanced.

The same goes for the Government of National Unity, he said.

Again, much of the focus and drama around negotiations and big press briefings and talk from politicians is ultimately “political grandstanding”—but it shows democracy in action.

While this clearly has an impact on markets and causes uncertainty, Roodt said that the results will play out in future elections—which may come sooner, if the GNU does fall apart.

South Africa’s tariff woes

The third major question looming over South Africa is the global hit from US President Donald Trump’s tariff war.

South Africa, along with virtually all countries, were hit with a minimum 10% tariff on exports this past week. Punitive tariffs higher than this were walked back on Wednesday, except for China.

Roodt said that the United States is sitting with the same problem as many other countries – its economy is in trouble, with the state simply spending too much money and needing to cut back.

While it is attempting to take an axe to all state spending, the Trump administration also sought to get in more revenue through the tariffs.

“The Americans are running huge trade deficits with most countries in the world – they import more than they export. That’s the thinking behind the tariffs,” Roodt said.

He noted that there are various views on whether the strategy will work, but the bottom line is that the tactic is extremely disruptive, especially in the short term.

This, along with the turbulence around the budget and the future of the GNU, forms the basis of his advice to anyone with investments.

“My advice to people is to understand that we’re heading for some difficulty and the South African economy will be affected by all of this – but it’s not the end of the world,” he said.

“The best you can do is sit on your hands, talk to your financial advisor, and don’t take any unnecessary quick decisions that you will be sorry about later.”