Private sector remains best placed to stimulate economic growth, Busa says

SA needs to build an economy that attains sustained growth of “beyond 5%” and is structured to be inclusive and equitable.

This will require the critical stakeholders, particularly government, business, and labour, to put aside ideology and dogma and to put national interest above all else, Business Unity SA says.

It was responding to the release of a document reflecting some of the ANC's thoughts on an economic recovery strategy after Covid-19.

Busa said the ANC document resurfaced old ideology and dogma of a significantly increased role in the economy for the state, interfering in the mandate and independence of the SA Reserve Bank, supporting ailing and nonstrategic state-owned enterprises and creating new ones.

“We remain convinced the private sector is best placed to stimulate such economic growth, provided the state creates an enabling environment and business and labour reach a constructive compact taking all criteria including inclusivity, affordability, and competitiveness into account,” Busa said.

Busa said it estimated a drop in the SA GDP of anything between 8.8% to 16.1% in 2020.

“Unemployment could be anything between 33.1% (narrow definition). This increases to more than this to 43.9% (broad definition) and the Reserve Bank estimates our fiscal deficit could be over 10% of GDP.”

Busa said some fundamental truths remain in any discussion on rebuilding the economy.

One of these is the imperative of getting local and global businesses to invest in SA. “This will be extremely difficult in the Covid and post-Covid period.”

Busa said it was also imperative to grow the economy at levels that address the inequalities and ensure it is inclusive so that the majority of the country's people are economically active.

“This means we need to agree on the structural reforms critical to enable investment, growth, and inclusion.”