The Inflation rate in Euroland continues to rise and reached double digits at 10% during September 2022 from 9.1% in August. South Africa’s rate was 7.6% in August and the current September estimate by Trading Economics / Statistics SA is 7.4%, which, if accurate, would see the 3rd consecutive month of a declining rate.
As stated previously, the increasing spread between Euroland’s and South Africa’s inflation rates will effectively weaken the Euro relative to the Rand, all the more so given the ever-present spectra of recession amidst soaring food and fuel prices and rising interest rates. And winter is at the door ….
The graph further down tracks the Euro-Rand exchange rate over the past year and whilst it is clear the Rand is in a strengthening phase one might well ask why this process is so slow given the rapidly incasing spread between the respective inflation rates.
The explanation to this can be found in the ‘Big Mac Index’ published by The Economist, which attempts to assess purchasing power parity (“PPP”) amongst countries, based on the economic theory of arbitrage where exchange rates should, over longer periods, effectively equalize the prices of the same goods and services (A Big Mac Burger being the item compared in this instance!) in comparative countries.
In the most recent index published, South Africa’s Rand was one of the world’s most undervalued currency. Again, as touched on previously, this can be ascribed to the Escom loadshedding saga that has reached particularly negative peaks in recent times and due to corruption and the states slow response to prosecuting and combatting this scourge. And the ANC election theatrics do not assist.
But the fact remains that the Rand is strengthening and as South Africa’s problems are addressed, such as the NERSA applications to materially increase alternative and sustainable electricity supplies, and corruption being progressively more targeted by the SIU, Asset-Forfeiture Unit and the Hawks/NPA, the more sentiment will improve, and the Rand’s strength will accelerate. Since Unify products are traded in Euro’s, our reseller-partners will enjoy the benefits of the continuing relative Rand strength.
On another note, the Atos Unify partner event held at the Inanda Club on Friday 7 October 2022 was a well-attended event and we missed those that could not attend due to health or other considerations. But we were pleased to welcome almost 50 reseller-partners, including Tawanda from Zimbabwe and Baptista from Mozambique. Giraffe’s onboarding of resellers from Africa grows monthly! Unify was represented by Simon Skellon (Chief Sales Officer) and Kim Hauser who attended in person whilst Rahul Kulkani and Narayan Gurusamy attended digitally.
Narayan has recently taken over as the head of the APAC region, a refreshing new change that we believe will significantly benefit our channel and partners. He spoke about his commitment to the region, offering to get involved in partner & end-user meetings and discussions to assist in bringing in business and maintaining a leading level of support. We encourage our partners to take advantage of this opportunity.
Playing to their strengths, the event was centered around Unify’s Critical Communications. Unify has highlighted the importance of shifting their focus from the dominant sector of knowledge workers to the largely overlooked frontline worker sector. This untapped business provides an opportunity for our partners to enter new market segments with a product and brand that outshines its competitors on multiple levels. Rahul discussed the market-leading Critical Event Management solutions by Everbridge (an Atos strategic partner) including: OpenScape Alarm Response, OpenScape Xpert and OpenScape next generation 911/ First Response.
Unify has released new material and content on the Critical Communications solutions and we encourage our partners to talk to us about these offerings or to visit the Unify Website and Experts Wiki. We look forward to the new opportunities and business that these solutions will bring, and we can assure you of our full support at all times.
Chartered Accountant (SA)
Advocate of the High Court of South Africa