You can also listen to this podcast on iono.fm here. ADVERTISEMENT CONTINUE READING BELOW JEREMY MAGGS: The upcoming two-pot retirement system should provide, in theory, much-needed relief for cash-strapped South Africans. But today, warnings are being sounded about being judicious with withdrawal and how much money you decide to use. With me now is Professor Adrian Saville, he’s a strategist and economist at the Gordon Institute of Business Science .
JEREMY MAGGS: Well, let’s talk about South Africa’s circumstances, given our indebtedness as consumers, do you imagine that there is going to be a rush to liquidate, to withdraw? My suspicion, given South Africa’s predisposition or a bias towards consumption, my suspicion is a disproportionate amount of the money that comes out of the system will be pointed towards consumption rather than looking after the balance sheet. To me, that’s as worrying as the compounding that’s taken away. It’s going to feed more consumption in South Africa rather than saving an investment, and saving an investment is the critical ingredient that’s missing from South Africa’s growth structure.