The Big Debate
B
used an enormous amount of resources with low productivity.”
Enterprise development and job creation should be priorities and integration with the rest of Africa, specifically sub-Saharan Africa, can boost sustainable long-term growth.
Finally, banks must play a critical role in facilitating growth. “In recent years, they’ve become less of an investment partner and more of an administrative player. They’re too risk-averse. As the engine of the financial sector, they must redefine the strategic role they need to play. They need to extend the allocation of national savings into various sectors, which requires a creative and entrepreneurial mindset. Banks have every interest in making sure the real side of the economy grows. The financial sector simply can’t hope to prosper with a growing number of poor and unemployed people.”
“People need access to skills, irrigation, tractors, seeds – land in itself is not sufficient for growth.”
Xhanti Payi
Payi, economist and Director at Nascence Advisory and Research, suggests that we concentrate first and foremost on developing human capital – our greatest resource. “We all want growth because it delivers prosperity and wealth for people. But putting people to work will create growth. Human capital is the driver of growth – we can’t hope that growth will happen and jobs will come out of that, since in some instances, companies can simply buy machines to take over from human beings. GDP growth happens when people do more: if I make five cars in a year and six cars the following year, that’s growth,” he says.
Payi believes a growth strategy involves finding out why we have 16 million economically inactive people and how we can help them become
• South Africa’s economic growth over the past decade has been disheartening.
• International and local influences, coupled with policy uncertainty, have cost the country goodwill and investor confidence.
• Also hard hit during the “lost decade” have been development ambitions.
• President Cyril Ramaphosa has ushered in what is being touted as a new dawn and his market-friendly policies appear designed to woo investors.
• However, South Africa faces a daunting task in correcting structural inequality and promoting inclusive growth.
• A concerted effort to invest in areas that would redress structural weaknesses in the economy and establish clearer policy direction is key.
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