While South Africa’s economy languished in the final quarter of 2019, financial services was identified as one of the more positive sectors. This correlates to BankservAfrica’s Economic Transactions Index (BETI) for February where the data reflects constant transaction growth from the rapid changes at banks. This could continue into the first quarter of 2020.
“The volume of transactions increased by 4.9% on an annual basis in February,” says Shergeran Naidoo, Head of Stakeholder Engagements: BankservAfrica. “This is an improvement on January’s 3.2% growth for the same period.”
On the payments side, requests for immediate payments via real-time clearing (RTC) increased by an incredible 66.1% year-on-year, according to Naidoo. “This represents the largest increase for RTC since April 2019. The normal debit transactions grew by 4.9% over the same period.” According to the BETI, the total number of transactions was 101 460 488.
“More interesting in this month’s BETI is the innovation in banking that is coming through in our transaction figures. This is leading to consumers opening more than one account and increased transactions,” explains Naidoo. “The sharp rise in the number of new bank accounts and the growth in interbank activities, such as transferring money between old and new bank accounts, have expanded the economic transaction movements that the BETI picks up.”
As such, while the BETI reflects South Africa’s underlying economic activity, some of the more recent influencing factors were not only for transactions of real economic goods, but also for interbank money transfers.
“Overall, it seems February was not as much of an economic decline as one would expect with the current load shedding,” says Mike Schüssler, Chief Economist at economists.co.za. “For now, we believe that the financial services sector and the broader banking industry have generated some economic growth. But this is not enough to lift the entire economy out of the woods.”
Stats SA’s news last week of the economic decline in Q4 2019 was predicted in the November BETI report as a possible consequence of load shedding.
“However, there are indications that the first quarter of 2020 could be a little better than the previous quarter. But this could change because of the coronavirus impact,” ends Schüssler.