Empty slogans from government will not rescue our economy

It's not often that the chief economist of a leading bank will use the word "awful" to describe data on the economy, but this was the word chosen by Standard Chartered Bank's chief economist, Razia Khan, yesterday.

He was referring to the latest GDP numbers issued by Stats SA which showed that the economy had contracted for the second consecutive quarter, sending South Africa into a "technical recession".

It is hard not to conclude that the political shocks of the first quarter have begun to have their inevitable economic effects, undermining consumer and business confidence.

Since thenthings have deteriorated on the political front as the contents of a slew of e-mails laying bare the extent of state capture by the Zuma and Gupta families have been revealed.

The decision by President Jacob Zuma to carry on as if there is no crisis adds to the problem. If Zuma is to be believed, the blame for the country's poor economic performance lies squarely with "white monopoly capital". This descent into populism can only end badly.

The real blame lies with the government. It has a sophisticated National Development Plan which spells out how the economy needs a clean and effective state with clear policies to attract investment.

While this plan gathers dust, the state becomes more and more mired in corruption and less and less effective at delivering services to those in dire need.

For the moment, investors are viewed with suspicion as the government talks up radical economic transformation and state-led growth.

The government needs to quickly demonstrate convincingly where economic growth is going to come from instead of bandying about slogans which are palpably out of touch with reality.