He says the need to have readily available cash for possible acquisitions - or to service debt - is why so much money is locked up in bank accounts around the country.
Non-financial corporate deposits have grown from R520-billion at the beginning of this year to R534-billion today, markedly higher than the R469-billion a year ago.
However, Michael Jordaan, chief executive of First National Bank says that "now is the time to spend" in anticipation of an economic boom in the years ahead as South Africa's economy starts to grow from the current forecast of 1,7% this year to 2,4% next year.
Retailers, food producers and manufacturers are holding healthy cash balances, with little or no debt, yet are not investing in the economy say local bankers.
Meanwhile, professional services firm Deloitte says that a lack of investment and a worsening skills shortage is threatening the competitiveness of South Africa's manufacturers and coupled with a lack of confidence to commit to major capital expansion projects means that companies are not investing.
Peter Attard Montalto, an analyst at Nomura says that cash hoarding was increasing and created a "downside risk for growth" in the South African economy.
Read the full article on www.businessday.co.za.
