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A wish list for 2022 to get our country to flourish again

A wish list for 2022 to get our country to flourish again

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Open any financial or economic journal, read any newspaper, listen to any television channel and you’ll hear or see the same story. So much has been written about the state of South Africa – the country of my birth and one that I have always been proud of to call “my home”. 

However, sadly over the past decade much has happened in my beloved country to cause me concern. Clem Sunter, the well-known South African futurist came up with the two scenarios for the country a few decades ago – either the “high road” to economic prosperity, social cohesion, and growth; or the “low road” to a failed state of stagnant growth and income inequality. In many aspects disappointingly, South Africa has travelled down the latter option. 

As an optimist, and of course wanting South Africa to succeed, I am still hoping we can get the country on a path of rapid economic growth and renewal. Set out below would be my 10-point wish-list for the government and business to prioritise and implement during 2022. It will lead to better financial outcomes and lives for many South Africans. 

1) Economic growth – Simply put, this is the only route to follow to create a wider spread of wealth and social upliftment. We have hit a new record-high official unemployment rate of now close on 35%, with youth unemployment hitting 65%. This is not sustainable and will lead to serious social unrest and instability. We need major structural reform, and fast, to get our economy to grow at levels of 5%-6% per annum for at least the next decade. I believe this is achievable (we achieved these levels under the Mbeki presidency), but only with having the bravery to make some bold policy decisions. Time is really running out, and any further delays will create irreparable damage. 

2) An increased level of urgency and decisiveness from our president and cabinet. For too long we have listened to the rhetoric and promises from government, with minimal actions occurring. We need to rid the government of a bloated bureaucracy of cadre deployed non-experienced staff. We need the private sector to invest and have confidence in the economy. We need small businesses to flourish and be incentivised to employ people, both foreigners and locals. We need to rid the government of the concept that increased levels of state intervention are good, rather than leaving markets to naturally create their own efficiencies and pricing levels.

3) Access to the web and high-speed fibre for all communities and people, young and old. This should be rolled out nationally with immediate effect, with data being priced affordably and not at “super profit” levels. Smart phones and the web can assist in taking the banking system out to the rural areas, as well as used in assisting with learner education, encouraging social interaction and the efficient roll out and management of the vaccine programme. 

4) Governmental focus on areas of the economy where we have a structural advantage, as well as those industries that are highly labour intensive. We have abundant mineral resources and the potential for a booming travel and tourism industry. The need for large infrastructure projects to tackle our crippled rail and harbour networks is immense. We require a move to more impact-type investments, social upliftment projects – with a focus towards green energy and reducing the massive inequality gap. Our country is well suited to solar, hydro and wind energy, all of which should be deregulated (the government has taken steps in this direction). By providing relevant incentives to the private sector to enter these spaces – it will have a material impact on job creation, economic growth, and improved global competitiveness. 

5) Eradication of the concept of xenophobia. Foreign labour brings much needed skills into our country across all levels. From undertaking jobs that locals do not want to do, to filling in gaps in the skilled job market where we are lacking. Foreign immigrants create jobs, by being entrepreneurial, starting small businesses and employing a handful of people. We should embrace foreigners into our country, set up incentives and tax breaks to encourage them to start businesses and employ local people, and discourage all acts of xenophobia. Alongside this – we need to stamp out homophobic tendencies. We have some of the highest levels of gender-based violence in the world. Violence, negative propaganda, and attacks on the LGBTQ+ community must not be tolerated. Our country has one of the most liberal constitutions in the world, and we all need to learn to embrace people across all varying communities. 

6) Stoppage of cadre deployment into all State-Owned Enterprises (SOE’s) with immediate effect. Rather ensure that each role is filled with well qualified, specialist people with experience and managerial training and not by politicians. In the past decade, virtually every SOE has been run into the ground due to cadre deployment, corruption, state capture and poor management – DENEL, SAA and MANGO, TRANSNET (rail), ESKOM, SANRAL (roads), PORTNET (harbours) and ARMSCOR are all in a state of total disarray. They continue to bleed government of tax revenue with their requirements for bailouts to stay in business. Skilled, experienced, and trained personnel with a track record of service delivery are needed. Career businesspeople and technocrats – not short-term political appointees. Public/private sector partnerships should be set up, and a total renewal of critical infrastructure should commence. 

7) Root out all corruption and change the culture across both the public and private sector. The wheel of the fight against corruption is turning, but too slowly. Much gets said about this topic, but we see only small gains and victories. The Zondo State Capture commission is finally complete and will be releasing its findings over three reports. Already, indications are that the findings are damning, and that corruption is embedded across the state and pockets of the private sector. We need arrests by a sufficiently funded and resourced NPA, we need people being disciplined and expelled from political parties, we need the private sector to also act and ensure they are not complicit in encouraging corrupt behaviour. 

8) An end to factionalism within the current government. The ANC is currently very clearly divided – between two distinct groupings that are pulling in differing ideological directions. Those leaning to “the left” on the political landscape, commonly referred to as the “Radical Economic Transformation” group and those more aligned to centralist economic policies. In addition, we have political activists aligned to the country’s ex-president and his supporters, versus those who back the incumbent, President Ramaphosa. This factionalism causes a stalemate in terms of economic policy and social cohesiveness. 

9) Urgently rebuild both domestic and foreign investor confidence and align with the country’s long-term objectives. To achieve this, investors require policy certainty and consistency across so many levels. Policies on critical issues such as land reform, property rights and the independence of the judiciary and Reserve Bank from government intervention, need to be put to bed once and for all. Business needs certainty on inflation targeting policies, environmental, sustainability and carbon reduction policies, unionised labour policies and a clear path on the future of mining and mineral rights. Big business further needs certainty on the supply of electricity and water, political and social stability, zero tolerance for corruption and a well monitored government tender process. Investors require functioning SOE’s, a working and efficient infrastructure network to move goods and services around, an education system that produces a relevantly skilled workforce, the ability to forecast economic growth and a fair, just, and equitable taxation system. Currently there is too much uncertainty in these critical areas. These are the basic requirements any reasonable, rational investor would require before committing to invest large amounts of investor capital. 

10) Transformation of the asset management and savings industry. There are currently around 50 black owned asset management businesses within South Africa. They manage around 20% of the total industry assets. Many of the managers are well below break-even and have a sub-optimal amount of assets under management. It is vital for both the health and success of the asset management industry that many of these businesses can survive and grow. 

Highly skilled investment teams have delivered investment returns as per their mandates yet have not become mainstream within the retail investment space with few financial advisors using their funds. Improving the savings culture in this country as well as materially growing the current investor base should be a major priority. We urgently need to support the growth of capable black owned asset management businesses. 

With this wish list I hope that we can get South Africa back on track. Away from the hazards of a failed state to which we are precariously close. Let us make the late Archbishop Desmond Tutu smile down on us, as he sees all the people of South Africa unite and become engaged citizens of this country – and most importantly he sees that the lives of millions of struggling South Africans start to improve.