Standard Bank Group CEO Sim Tshabalala has pleaded with leaders in South Africa and across the continent to make it easier to do business in their countries by reducing red tape and liberalising their economies.
Tshabalala made these comments in an interview with CNBC Africa on the sidelines of the World Economic Forum in Davos.
He said Standard Bank is urging African countries to reduce the risk premium associated with investing on the continent.
To do this, he advised political leaders to liberalise their economies, make it easier for goods, people, and ideas to flow across the continent, implement fiscal discipline, and make it easier to do business.
Reducing red tape, in particular, is vital. “Make it only take a day to set up a company, not six months,” Tshabalala said.
This will make it easier for small businesses to transition from the informal economy to the formal economy while widening the tax base and creating a more resilient state.
Concerning South Africa specifically, Tshabala said the country has incredible competitive advantages but has failed to capitalise on them. He called for the state to improve its efficiency to capitalise on them.
“Please improve the quality of our institutions. In the case of South Africa, we use the lovely phrase ‘Please capacitate the public sector’.”
“Some parts of the public sector are excellent, such as the National Treasury and the Reserve Bank. Replicate what is happening in those across the board,” Tshabalala said.
“Please capacitate the state,” he repeated. “Please professionalise it. Please continue to make doing business easier.”
Previously, Tshabalala has said that South Africa appears to be suffering a death by 1,000 cuts through its repeated missteps and own goals.
He emphasised the negative impact of elevated load-shedding levels, logistical inefficiencies, and financial greylisting as examples of some of the 1,000 cuts.
Greylisting makes it more challenging to do correspondent banking with global partners as “we are getting more and more questions”.
It has become more complex to do regular trade transactions as partner banks require more forms and more paperwork. This makes these transactions less efficient and more expensive for Standard Bank.
Correspondent banks are forced to ask more questions of South African banks and companies performing international transactions as regulation pushes them to gather more information now that South Africa is on the Financial Action Task Force’s greylist.
Issues such as greylisting “are a death by 1,000 cuts – they all add up”, Tshabalala said.
“Things that are negative about our country and diminish our status are happening slowly, but they add up. Greylisting is but one in a long list of things that create a negative perception of South Africa.”