SA’s Cost of Capital Increases During Covid Crisis

Government ministers would be shocked by the economic value implications of sovereign risk and its impact on the cost of capital. CDS’s have widened to 300 basis points since Covid struck further raising the cost of capital for businesses to invest in SA. Michael Avery speaks to Prof Brian Kantor, an economist and head if the Research Institute at Investec Wealth & Investment; and David Holland, a co-founder of Fractal Value Advisors about the relationship between the cost of capital, investment and South Africa’s economy and what government can do to bring down the cost of capital.