Getting the fundamentals right and seizing new opportunities will reverse economic woes
Hope for reviving the SA economy roams the halls of the National Treasury. In his recent budget speech finance minister Enoch Godongwana announced that the government is expecting a budget surplus, with revenue exceeding non-interest payments by 2023/2024. If realised it will be the first time in 16 years. The last time being in 2007/2008 with Trevor Manuel at the helm. It was a different time.
This is the base from which the economy must be revitalised. It’s a momentous task, but not impossible to achieve. Through engagements with different sectors we attempt to gauge what the impediments to economic growth are and how they can be overcome. Policy certainty is another key component the government needs to streamline. Investors have indicated that SA’s investment climate is uncompetitive as they have no guarantee that laws won’t change in the short term. This is particularly concerning in the energy and mining sectors. Furthermore, there is a call for a re-evaluation of the country’s transformation policies.
Tackling crime and corruption is another urgent matter to attend to. Not only does it erode confidence but businesses are forking out increasingly large amounts of money for private security and insurance, and with good reason. According to one report, the disruptions caused by the so-called “construction mafia” have cost the sector more than R40bn. These wasted funds could have bankrolled more productive measures.
The latest Critical Skills Survey conducted by Xpatweb reveals that 77% of organisations are struggling to obtain critical skills, forcing them to employ individuals from outside the country. In a rapidly evolving environment businesses simply can’t remain competitive if their staff are not properly skilled. Again, if business is hampered so is economic growth.
These types of collaborative efforts can be used to lure investors looking for opportunities brought about by new technologies. SA has already secured an $8.5bn fund to invest in renewable energy, green hydrogen and electric vehicles. As the global call for a just transition to a greener economy grows, so does the pool of funds made available to reach this target.
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