South Africa

Two simple things the government can do to improve South Africa

Efficient Group chief economist Dawie Roodt said two quick wins for the government to improve business confidence are to clean up the country and fix the traffic problems.

Roodt shared these ideas as part of a discussion about the South African economy in Mark Sham’s State of the Nation podcast.

Last week, the South African Reserve Bank slashed South Africa’s GDP growth forecasts for the next three years to 0.3%, 0.5%, and 1%, respectively.

Reserve Bank governor Lesetja Kganyago said extensive load-shedding and logistical constraints resulted in it cutting its GDP growth forecast for 2023 to 0.3%.

The Reserve Bank said the high levels of load-shedding deduct as much as two percentage points from growth in 2023.

Roodt said the slow economic growth is of serious concern as it will perpetuate, and even worsen, high levels of unemployment and poverty.

Combined with rising food prices, it creates a toxic mix where citizens may take to the streets and resort to violence.

The situation can be exacerbated by politicians making unrealistic promises and blaming institutions ahead of next year’s election.

Roodt said it is impossible to fix the South African economy ahead of the elections, which places the ruling ANC in a challenging situation.

However, all is not lost. “There are two simple things President Cyril Ramaphosa can do to regain some confidence in the South African economy,” he said.

  • Clean up South Africa  – The president must say South Africa is filthy and everyone must join an initiative to clean the place up.
  • Fix the traffic – Make sure people follow the rules of the road to improve traffic in South Africa.

Roodt said although these two things sound simple, they will help to build business confidence and give investors a more positive view of the country.

“If you can say we had this drive to clean up South Africa and we were successful, everyone is going to support you. Nobody likes living in a filthy country,” he said.

“When it comes to fixing the traffic, I am not talking about building new roads. Just make sure people follow the rules of the road.”

These two initiatives are affordable to implement and will enjoy widespread support among all citizens.

Roodt said it is also important to fix complicated structural problems in the economy, like Eskom, education, and the police. However, it will take a long time.

A good place to start is to focus on these two simple things to show the government can be successful at something.


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