South Africa

South Africa on borrowed time

The chorus of business executives warning South Africa to revive economic growth or risk becoming a failed state is getting louder.

The continent’s most-industrialized nation needs strong and decisive leadership to foster public-private partnerships and address high unemployment, poverty and inequality.

This is according to ex-central banker and former head of the Presidential Climate Finance Task Team Daniel Mminele at an event on Tuesday.

Mminele, chairman-designate of Nedbank, joins MTN CEO Ralph Mupita in warning against complacency.

South Africa has an unemployment rate of 32.7%, one of the highest globally according to the International Monetary Fund, and is suffering from an energy crisis, which is increasing costs for companies.

That’s making it difficult to create jobs needed to reduce poverty and inequality.

The country needs a “higher sense of urgency in tackling these issues and much stronger implementation frameworks and stronger accountability frameworks”, Mminele said.

“Otherwise, we are indeed, as many have said, running the risk of becoming a failed state because we’re already on borrowed time.”

The nation is also struggling to resolve the power crisis as the state-owned Eskom Holdings SOC Ltd. implements record blackouts, affecting businesses and productivity.

The South African Reserve Bank cut its growth outlook for 2023 to 0.3%, while the IMF expects just 0.1% GDP expansion.

“I don’t think it’s too late to fix what we need, but it just means us re-committing ourselves and redoubling our efforts,” he said.

Mminele was appointed as the CEO of Absa after he resigned as the deputy governor at the SARB.

*Headline image source: GCIS


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