CEO Slams High Rates

Capitec: Outgoing Boss Shares Frank Views on SA's Economic Growth

- Liesl Peyper

Rather than considering a narrower inflation target for South Africa, greater emphasis should be placed on maintaining an acceptable gap between real interest rates and inflation, one that encourages economic growth.

Outgoing Capitec CEO Gerrie Fourie expressed this view on Tuesday, saying interest rates should actively support the economy.

"A better way to look at inflation targeting is to ask if the gap between the real interest rate and inflation is big or small. What is the real cost of interest, and what should that be?"

Fourie, who retires in a few weeks, made the comments during a discussion with journalists.

His comments come as the South African Reserve Bank intensifies efforts to shift the country's 3%-6% inflation target range to a narrower 3% level.

Analysts and economists are divided on the inflation target. Some argue that the current low inflation environment presents a window to reset inflation expectations without significantly undermining growth.

Others say SA's real interest rates remain too high and should be reduced to stimulate economic growth.

Growth should be only priority

Fourie believes SA should have one, single aim: economic growth.

"If you have one objective and your entire team focuses on that, you deliver. But if you have 10 objectives, you do things [by] half."

He stands by his recent comments suggesting unemployment in the country may be overstated and that it is closer to 10% compared to Statistics SA's official unemployment rate of 32.9% in the first quarter of 2025.

"I maintain that our employment rate is much lower," he says, pointing to SA's vast informal sector, which he believes is underestimated and underdeveloped.

While the comment drew criticism, Fourie says it has triggered "positive exchanges".