How to unblock the SA economy

There is no way to dress it up - 0.6% growth after a quarter of contraction means South Africa is squandering its potential. Three of the country's leading economic thinkers discuss what can be done.

Kevin Lings, chief economist at Stanlib

The government could embrace the concept of "ready-to-go" projects - infrastructure-related projects that can start reasonably quickly (ideally within six to nine months), can be funded through existing budgets, will meet local infrastructure needs and can be completed in two years.

Typically, these projects do not require extensive engineering design or a protracted environmental assessment.

The growing constraints on government finance, which is reflected in rising debt levels as well as the recent credit rating downgrades, suggest that many large infrastructure projects could be initiated and potentially fast-tracked using private-public partnerships.

These have proved successful in the renewable energy sector, and it would appear that the private investor community has an appetite to invest in such projects.

Adrian Saville, chief investment officer at Cannon Asset Managers

There are three key ingredients. First, the government needs to produce the infrastructure spend that is in the pipeline, which is taking a long time to materialise. The beauty of that spend is that it has very high backward and forward linkages, a large spillover effect and it is productive spend. The installed infrastructure stays behind and facilitates business, and builds the competitive capabilities and capacity of the economy and businesses that operate in it.

Second, we live in one of the fastest-growing regions of the world, but we do relatively little business with our neighbours. On the policy front, the visa restrictions for travel with Kenya impede doing business with neighbours.

South Africa seems to be very good at getting in its own way. It has impressive capabilities to contribute to the development of the region and our businesses have the prospect of playing a very big role.

Third, we need to improve the ease of doing business. For every new piece of legislation that is ushered in, two have to be ushered out.

If you put these three ingredients together, it is well within the country's capability to get to 6% growth, which will be inclusive because it will foster an environment in which small businesses are built, and smaller businesses are the engine of job creation.

Azar Jammine, chief economist at Econometrix

Foremost, South Africa has to improve its educational outcomes. Everything else would fall into place if people were better educated.

They would be more employable, be able to produce more and, as a consequence, the country would be less reliant on imports.

If people were more employable and productive, they would earn more. As a result, we would not have the adversarial labour relations that are engulfing South Africa.

If people were better educated and better trained, they would have a greater proclivity to set up their own businesses - and small businesses proportionately create far more jobs than big businesses.

Improved cooperation between public and private sectors is also desperately needed. In particular, the public sector needs to recognise that the private sector has a higher proportion of skills and that it is only through the combination of these two that progress can be made.