EDITORIAL: Getting SA battle-ready with our economic heroes
Things might look dismal, but this country has myriad potential successes just waiting for the chance to shine
Business people and entrepreneurs should be treated as heroes, as their aim is to develop and grow SA’s economy, President Cyril Ramaphosa preached to the converted to much applause at last week’s investment summit.
As the president highlighted, we’ve treated business as the enemy for far too long in this country. It shows in all the numbers — declining foreign direct investment, declining per-capita GDP growth, rising poverty levels, unemployment near record levels. Today nearly 9-million South Africans who would like a job are sitting idle.
This may be an odd time to turn to former US defence secretary Donald Rumsfeld for advice. You have to go to war with the army you have, he said, not the one you wish you had.
The good news is that the economic army we have may be a bit battered and bruised, but there are a few bittereinders left standing that we can go to war with — and win.
The good news is that we have plenty — and with this we mean top-of-global-rankings plenty — of untapped mineral riches left in this country
First, we need to acknowledge the importance of the mining sector in SA: not just for the sake of mining jobs, tax receipts and foreign exchange earnings, but especially for the knock-on effect a healthy, growing mining industry has on the manufacturing industry. The army we have is a manufacturing sector that is closely linked to commodities, as it has been for decades. And in the absence of massive government incentives and import protection, as enjoyed by the automotive manufacturers, this will remain the core of our manufacturing industry.
The good news is that we have plenty — and with this we mean top-of-global-rankings plenty — of untapped mineral riches left in this country. Platinum, diamond, manganese and chrome riches stuck in the ground are worthless to anyone; keep improving the regulatory and business environment, and we’ll see more shafts getting sunk and ultimately more orders flowing to factories.
With oil prices hovering around $80 a barrel, also expect to hear more about our potential untapped oil and gas resources. A number of major players, including Sasol and Italy’s Eni, have long been keen on exploring offshore, or for shale gas onshore — plans that have been mired in regulatory red tape and environmental opposition. Finding abundant energy resources could be a game-changer for this economy, and the sooner the government allows for safe and responsible drilling, the sooner we’ll know whether there’s another battalion to add to our forces.
Mozambique next door serves as an excellent example of the multibillion-dollar investments that can be lured — despite a challenging economic and political environment — when rich deposits are found and investors are welcomed. It also offers a great export market opportunity for SA manufacturers and other service providers, which should be exploited.
The same goes for the improving economies of Nigeria and Angola, two key markets in sub-Saharan Africa where a number of JSE-listed companies have long been present. Their success is our success, and the same effort should be made to enchant their leaders and entrepreneurs, as we are doing with China’s.
There is hardly a sector of the local economy that wouldn’t benefit from a bit more support and a little less government interference. We have been blessed with incredible tourism potential, a sector that offers low barriers to entry in certain areas and has high job-creating potential with limited training required. The visa debacle will seemingly soon be something for the history books; if we can improve our safety situation, this is a sector that will simply be unstoppable.
Our farmers have performed miracles to stay internationally competitive in an environment where developed countries benefit from rich state subsidies. Remove the uncertainty around expropriation and improve some of our creaking infrastructure, and who knows how high we can fly?
Our financial services industry is world-class, producing innovations that are implemented across the globe, such as Discovery’s Vitality programme. Success breeds success, as we see with innovative products such as Brightrock’s life insurance model — started by a team of ex-Discovery heavyweights.
Over-optimism may be an SA trait not limited to Chiefs fans, but we believe there are plenty of reasons to feel battle-ready.