The country has become trapped in economic stagnation because Ramaphosa has failed to act decisively to address many problems we face. We believe this is largely due to political resistance, but with a new Economic Policy paper, we are hopeful that urgent changes will materialise. Here are a few simple things to be done that will have a meaningful impact in a short period of time:
Boost export earnings and foreign investment – Exports will only grow meaningfully with foreign investments given the shortage of domestic savings. Ramaphosa recognises this and that foreigners need confidence in the sustainability of the country to invest.
Address the skills shortage – This is the biggest reason for our current economic woes. It will take a long time to fix, but in the meantime the country needs to be open to importing the required skills.
Changes to Home Affair policies – Changes need to be bolder to enable the movement of skilled people, which will boost business growth.
The opportunity in tourism – Visa regulation needs to be changed for easier access to the country. Tourism is probably our greatest short-term economic opportunity. It will create jobs for relatively unskilled people.
Document property ownership – Many people own property but do not have title deeds to confirm this. Economically, owned property can provide collateral for entrepreneurs to raise capital and boost the small business sector.
The agriculture opportunity – This industry has been one of our success stories. There is massive demand for food globally and SA has the capacity to grow and provide large numbers of jobs for the unskilled. Policy changes should be focused on promoting this opportunity and not just the social value in subsistence farming.
Eskom – Everyone recognises this must be fixed. The issue is to ensure the right management is employed to mend the Utility.
Mend the urban rail system – The commuter rail system in our cities is in serious decay. A reasonable upgrade would be at a relatively low cost and would provide a much-improved quality of life to commuters, which would have a positive economic impact.
Amend the Labour laws – It needs to be clearly recognised that the present dispensation is a principal cause for high unemployment. The laws are business ‘unfriendly’ and need to be amended to promote more investment in business.
Law and order – The most immediate threat. Crime and social disorder are imposing a serious burden on business and corruption restricts sustainable competitive growth.
Investonline’s View – The country should only get better from here
We believe Ramaphosa knows what needs to be done, but he has been unable to make the swift progress we all desperately want, due to political resistance in the ANC and a lack of skills to implement changes.
Positive progress is taking place, unfortunately slowly, but changes are being implemented and we believe the economy should only improve from its current low base.
We believe the negative mood and outlook is reflected in the currency, our bond prices and investment markets, which includes a likely debt downgrade by Moody’s next year.
Any positive news or change should lift the very depressed consumer sentiment and investor confidence, which should drive investment markets up.