The Big Debate
B
of local authorities has been improved, skills transfer can take place. This would be costly, but we could fund the exercise through a dedicated job-creation bond, which could be issued locally or internationally.” Botha maintains that even an initially modest amount, repayable over about 20 years, would suffice: “By then, extra tax revenues via job creation would help to service debt and even start repaying capital.”
Another key strategy is to woo tourists from the United States and Europe, who make up 75% of South Africa’s international visitors. “One of South Africa’s few long-term competitive advantages is tourism – not gold or platinum,” he says. “We can’t compete with South-East Asia when it comes to most manufacturing sectors and it’s not even a level playing field against China, which doesn’t sign labour protocols and subsidises some firms. Despite our doing well in niche markets – motor manufacturing, processed food – it’s our flora and fauna and hospitality industry we should focus on, along with our cultural diversity. However, we have to counter the perception that South Africa’s dangerous for visitors.”
Botha says we should also make it easier for businesses to engage in intra-regional trade within the Southern African Development Community (SADC). “We must deregulate, as well as improve transport corridors and infrastructure,” he says. “We need to identify manufacturing sectors where relatively low-level protection from governments in the region could allow us large-scale import substitution, especially with respect to China. South Africa can supply vehicles. Mozambique has enough gas for the whole world for the next 200 years! We can potentially create millions of jobs within the SADC and place a quota on Chinese imports.”
Finally, he stresses that property ownership and security of land tenure are vital for productive agriculture, one of the biggest employers on the continent. “We could potentially expand our output throughout the SADC, weather permitting,” he says. “A lack of food security remains a vexed problem in most African countries and South African farmers are helping to feed our continent.”
“Banks should ask themselves what their developmental role is – and how they can promote a more inclusive economy.” Dr Thabi Leoka
Independent economist Leoka believes short-term growth may be an “easy win”, but long-term growth will involve major structural changes. “Increased confidence in the new government has provided cheap stimulus, but we’ll need to develop clear policies to drive growth. Policy uncertainty has lost us investment. In the oil and gas sector, we lost investment to the tune of US$2 billion. We need a clear Mining Charter, which the mining sector and business agree upon. Government must articulate its land policy clearly or it will be perceived as negative, making it difficult to get buy-in. Land is very significant. People who own land can borrow against it, start businesses, and so on – the majority of people can’t participate fully in the economy at this time because they don’t have title deeds.”
Leoka says we need to reconsider spatial development, which currently is not as inclusive as it should be. “Inclusive spatial development – building low-cost housing in upper-income areas – will allow businesses to thrive, as workers would live closer to their place of employment. Workers would also have more money, as transport costs account for a significant portion of their salaries. Our suburbs would also be safer. Shops would close later, businesses could operate in two shifts, employment would increase and we could create vibrant precincts as one sees in Europe, for example. This solution is a low-hanging fruit that doesn’t require policy change.”
Education is an issue for Leoka because “the education system needs to talk to the country we want to see in the future”. One should not be excluded from the workforce because one does not have a degree, she believes. “The school and tertiary education system needs to change. It should offer general courses at undergraduate level, with the option to specialise post-graduation, as in the United States or the United Kingdom. We should also focus on entrepreneurship at school level and bring technikons back, because of their emphasis on practical skills.”
Leoka believes our Africanness should be seen as a competitive advantage. “We mine minerals, but
we don’t work along the entire value chain – we should focus on beneficiation, not on outsourcing and exporting. We should look at how we can leverage our natural endowments. We’ll be more competitive if we change the status quo. We’ll never beat the United States or Europe when it comes to electric cars and artificial intelligence, etc – rather, we should identify areas in which we can lead: manufacturing, for example. We should focus on intra-regional trade. An isolated South Africa won’t grow.”
With intra-African trade currently at 16% only, much more can be done. “We could sell to countries in Africa that are currently importing from Europe, which will create employment. Positioning ourselves as one of the most developed countries on the continent can only be an advantage.” Infrastructure and transport are also important, says Leoka, who notes that South Africa should own its air routes “so that we don’t have to fly to Mali or Guinea via France, for example”.
She also feels more should be done to support small business. “Government doesn’t necessarily put the right people in place for jobs – it could contract work out to small companies that want to thrive. We need to focus on people willing to work, not on patronage.”
Finally, she believes the financial sector should play a more meaningful role in development. “Banks write off enormous amounts of debt every year, yet continue to lend to businesses with high-risk exposure. At the same time, they’re unwilling to lend to people with no debt, but with no credit record, either. Banks should ask themselves what their developmental role is – and how they can promote a more inclusive economy.”
She concludes with this key question for the sector to ponder: “Shouldn’t they be taking a risk on South Africa and the future of the country?”
.
Gradient Issue 2 23
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52 |
Page 53 |
Page 54 |
Page 55 |
Page 56 |
Page 57 |
Page 58 |
Page 59 |
Page 60 |
Page 61 |
Page 62 |
Page 63 |
Page 64 |
Page 65 |
Page 66 |
Page 67 |
Page 68 |
Page 69 |
Page 70 |
Page 71 |
Page 72 |
Page 73 |
Page 74 |
Page 75 |
Page 76
