Stormy politics cast pall over economic growth
The unstable political climate is an obstacle to South Africa's development and economic growth, participants at The Directors Event, hosted by the Sunday Times and MMI Holdings, said on Friday.
The event, now in its second year, brings together private- and public-sector directors and other stakeholders to discuss issues of national interest.
With South Africa facing a possible ratings downgrade and a predicted growth rate of less than 1%, its global competitiveness appears to be declining further as the country's politics become increasingly volatile.
Last year, the World Economic Forum released data showing that South Africa had climed seven places to 49th on its 2015 Global Competitive Index.
However, following the unexpected axing of Nhlanhla Nene as finance minister in December and recent calls for President Jacob Zuma to resign, delegates this week said the government urgently needed to get its house in order.
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The lack of proper governance hindered attempts to boost economic growth .
Wiphold executive director Gloria Serobe, who chaired the event, said sound management of the country — and better crisis management — were vital to growing the economy.
“Drastic measures are required to deal with our macroeconomic situation,” she said.
Cutting the number of cabinet ministers could help to reduce costs and show investors that “our government is serious about cleaning things up”.
Nontombi Marule, director of innovation and technology at the Department of Trade and Industry, said healthcare and education were the two major issues South Africa had failed to address.
Primary healthcare and education - shaken by the violent #FeesMustFall movement - were still beset by deep structural issues. The issues of policy and regulation in healthcare, and finance and curriculums in the education sector had not yet been comprehensively addressed.
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On Friday, those at The Directors Event reiterated that good quality, affordable healthcare and a renewed focus of skills development and education at all levels were vital drivers of economic growth.
They added that empowering entrepreneurs in small businesses and providing them with capital could help fast-track growth and increase the South Africa's global competitiveness.
Although political instability had weakened the rand, delegates emphasised that entrepreneurship would be the engine for the country's growth. And some sectors of the economy — such as mining and manufacturing — had benefited from the fall of the rand.
The need for the private sector to work closely with the public sector was also raised as an essential component of addressing the country’s problems, as well as the creation by the government of an enabling environment for businesses to boost economic growth and development.