Growing the economy a priority for turning SA’s dangerous tide
Ramaphosa and his government must find the courage and impetus to take SA forward for future generations
Now that President Cyril Ramaphosa’s signature summits (jobs and investment) have come and gone, it is time for all South Africans to get on with the job of fixing the economy by uniting around a bold and compelling vision of the future. Time is running out.
The pedestrian growth, increasing unemployment and scourge of load shedding are just some of the signs that we are in deep trouble, if anyone needed reminding.
Ramaphosa has rightly identified fixing the economy as one of his top priorities. He needs local and international investors fully behind him to succeed in this project. He has done an impeccable job of reframing the national and global narrative on SA as open for business. Now he needs to turn nice words into confidence-building actions to win and retain the hearts and minds of the investor community.
At an investor round table in New York in September, which I attended, Ramaphosa was quick to invoke Nelson Mandela’s name by saying the country’s contested land reform without expropriation will be infused with Madiba’s DNA, and investors need not worry about a reckless approach and land grabs.
The country can and must find ways of growing the economy and decreasing unemployment, which is at a record high of 27.5% based on the restricted definition, which excludes those who are unemployed and not actively job hunting. Youth unemployment is dangerously high and requires urgent and decisive measures to tackle the problem before it escalates even further. This is also key to reversing the other pressing national challenges of poverty, inequality and social unrest, which are notoriously on the increase.
SA is Africa’s last hope. Its remarkable success in consolidating the democratic project, establishing the rule of law and encouraging racial harmony and reconciliation following the transition to democracy should be a source of great inspiration at a time when global politics is increasingly fronted by populist and polarising leaders. Ramaphosa’s recent defence of the globalisation project at the recent Group of 20 summit in Buenos Aires positioned SA well against the unhelpful and misguided protectionist and populist tendencies of some western leaders.
SA can and must position itself as a globally competitive and admired inclusive economy and society, capable of attracting and retaining massive inflows of foreign direct investment to propel the country’s growth and prosperity for generations. This requires winning hearts and minds at home and beyond by fighting corruption and reinforcing the supremacy of the country’s highly esteemed constitution.
Corruption in the public and private sectors need to be dealt with decisively without fear, favour or leniency to those who may be politically connected or financially powerful. This will be one of the litmus tests for Ramaphosa’s effectiveness as the country edges closer to the 2019 general election, which is set to be the most contested since the dawn of a nonracial democracy in 1994. The governing ANC will be fighting to regain lost ground as its support base has declined over the past two general elections held in 2009 and 2014. The opposition DA under Mmusi Maimane’s leadership, and the radical EFF of Julius Malema, are jostling to capitalise on the ANC’s weaknesses. Patricia de Lille’s newly launched Good party will also be aiming to make inroads by targeting the coloured vote.
The 2019 elections will be a crucial defining moment in the country’s maturing democracy and evolution as a nonracial democracy. The president’s inaugural investment and job summits presented a golden opportunity for SA to make the requisite bold and decisive moves to extricate the economy from recession and unlock its full growth and development potential. There is a pressing need for proper and effective follow-up to implement the commitments made at the summits, to avoid reducing them to glorified and useless talk shops, like many summits tend to be.
What are some of these bold and decisive moves SA can and must make to turn its economy around and deliver prosperity for generations? First, the country needs to prioritise economic growth as a burning national strategic priority that all other policies should seek to promote. All ministers and business leaders must account on how their policies and practices promote the growth imperative. A national consensus on sustained inclusive and job-rich growth is required to ensure effective alignment between government, business and the country’s strong but increasingly divided and quarrelsome trade union movement.
Growth is the goose that lays the golden eggs for SA. Without it, the extent to which the country can attract and retain local and foreign investment and reduce unemployment, poverty and inequality, is likely to be limited.
Second, the country needs to focus on measures to enhance investor confidence. Local and foreign investor confidence rests upon, among others, policy certainty and predictability, availability of talent, efficient visa processes and the sanctity of contracts. Visible and felt progress, not just nice words, is what will move the dial.
Third, SA needs to reorient and realign all of its policies to promote the global competitiveness of its companies and economy. Innovation and labour productivity are key areas of opportunity for improvement. Lastly, a step change in the performance of our key state-owned companies is urgently required. Eskom, SAA, Transnet and the SABC make news for all the wrong reasons. They are key to the growth and competitiveness of SA and require urgent improvements in their effectiveness and efficiency.
SA requires leaders with the will, commitment and courage of their convictions to do what it takes to unlock the country’s full economic and developmental potential. Ramaphosa has shown in the past that he has what it takes; he must now lead the charge to take his nation forward to prosperity for generations.
• Dlamini is chairman of Aspen Pharmacare Holdings and Massmart-Walmart.