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Hi Guys,

It has come to my attention to warn you as my friends and family of the current economic conditions we are facing in South Africa and the rest of the world.

Yesterday I attended an ABSA conference whereby Tito Mboweni was our guest speaker. Tito Mboweni has made it clear to us that the worse is yet to come so we must tighten up our belts in terms of getting into debt. Before I begin with the real figures, he gave us an example that if a person goes to KFC to buy chicken using his Credit Card for an amount of R40.00 this implies that after the 6 months period you have bought the chicken for R72.00. Most of us do not know this but it is true and he has given us advice to STOP USING CREDIT CARDS BECAUSE YOU DON’T HAVE CASH. Do not use credit cards for luxury items only for things that you really need.

The situation now is that we have reports that we do for the reserve banks whereby we forecast the future using certain drivers and getting the economist analysis which is called Medium Term Plan for 2009-2011 its basically three a year plan.

1. It shows that the interest rate will go up to 19% (currently we are at +-14.5%) from now up until 2010 just before the World Cup. The good news is after the World Cup it will decrease.

2. Inflation (unemployment) will go up to 12% (currently sitting at

+-6%)

3.The GDP (basically food stuffs) will increase by 15% I’m not sure what it sitting at now.

4. The petrol will also increase by up to R13.78 per litre and diesel to R15.05.

What causes this:

1. The political instability of the country (investor’s perception of the new President of the country).

2. The scarcity of resources i.e. low output on gold, farming of rice etc.

3. Lack of skills labour in the country.

4. Unemployment

To add to this on our March financial statement Absa profits have dropped by 10% and as of the month of March ABSA will repossess 700 houses in the country. ABSA will employ about 1500 staff to work at the collections department as our impairment of assets ( bad debt ) are increasing very fast. This has been approved by Exco so we are waiting for the appointment of the employee agent to recruit those staff.

So ama private numbers asazokhala emafowunini abantu. Elami lithi for now and next year.

DO NOT engage in instalment sales transactions for no real reason, really ask yourself do you really need that.

So guys that was it for me, I hope you will take these changes into your budget for this year and the next.