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THE latest economic figures showing that the South African economy has slowed down in the past year further reinforce the argument that the country’s economy needs an all-hands-on-deck approach by all stakeholders to prevent its further plunge.
This week, BankservAfrica's Economic Transaction Index (BETI) released a report that showed annual economic growth slowed to 0.2% last month.
This is shocking, considering that it is happening at a time when most economies in the African continent are posting pleasing economic growth figures.
The index by the electronic payments transaction firm disclosed that not even the pre-election spending of political parties could bring impressive movement back into the economy.
This shows how bad things have become, even though this is not new. In the past couple of years, South Africans have known that the economy is not doing well, but not to this extent.
At this stage, what matters most is what the government and other stakeholders are doing to fix the country's struggling economy.
Some commentators believe that the government is poised for a serious attempt to make the economy grow, because it now has to pay back the people that voted it into power.
But I find this argument far-fetched, given the fact that the ANC government has been in power for two decades and the latest economic underperformance has occurred under its watch.
So what can they do now which they failed to do all these past 20 years? Granted, we have heard that this time around they want to seriously implement the national development plan, the ANC’s economic blueprint.
But this plan is thin on detail, making it hard for me to support it because I am in the dark about exactly what it plans to do next.
This brings me to the next point. The government should work closely with the private sector to improve the economy.
In the past, this partnership has been slow to take off as it should because of the lack of trust between the two entities.
Be that as it may, I personally believe that GDP growth will possibly continue to lag because of slowing consumer spending, slow private fixed investment and limited state expenditure.
But there are other solutions some people think can drive the economy to greater heights.
End to platinum strike is crucial
Steve Meintjes, a senior analyst at stockbrokerage firm Imara SP Reid, this week told me that the government should start by making sure that the almost four-month-old wage strike in the country’s platinum sector comes to an end.
He said if they fail to do this, the economy may not obtain the projected 2% growth by the end of this year.
“Not many countries in the world have had a wage strike that lasts for almost four months,” Meintjes said, adding this was not good for the South African economy going forward.
“All parties should agree to find a way of fixing the wage strike. If the strike continues to take so long to resolve, then there will be no economic growth in the country,” he said.
I think the rest of this year is poised to be an extension of a bleak picture of slow growth and less accommodative policy. This is in view of the fact that I feel the government and the private sector are not doing all they can to try and fix the struggling economy.
An example is that this week, the platinum strike threatened to get out of hand and become bloody. But South Africans have heard very little from government on what needs to be done to avoid further turmoil at the mines.
- Fin24
*Mzwandile Jacks is an independent journalist. Opinions expressed are his own.
This week, BankservAfrica's Economic Transaction Index (BETI) released a report that showed annual economic growth slowed to 0.2% last month.
This is shocking, considering that it is happening at a time when most economies in the African continent are posting pleasing economic growth figures.
The index by the electronic payments transaction firm disclosed that not even the pre-election spending of political parties could bring impressive movement back into the economy.
This shows how bad things have become, even though this is not new. In the past couple of years, South Africans have known that the economy is not doing well, but not to this extent.
At this stage, what matters most is what the government and other stakeholders are doing to fix the country's struggling economy.
Some commentators believe that the government is poised for a serious attempt to make the economy grow, because it now has to pay back the people that voted it into power.
But I find this argument far-fetched, given the fact that the ANC government has been in power for two decades and the latest economic underperformance has occurred under its watch.
So what can they do now which they failed to do all these past 20 years? Granted, we have heard that this time around they want to seriously implement the national development plan, the ANC’s economic blueprint.
But this plan is thin on detail, making it hard for me to support it because I am in the dark about exactly what it plans to do next.
This brings me to the next point. The government should work closely with the private sector to improve the economy.
In the past, this partnership has been slow to take off as it should because of the lack of trust between the two entities.
Be that as it may, I personally believe that GDP growth will possibly continue to lag because of slowing consumer spending, slow private fixed investment and limited state expenditure.
But there are other solutions some people think can drive the economy to greater heights.
End to platinum strike is crucial
Steve Meintjes, a senior analyst at stockbrokerage firm Imara SP Reid, this week told me that the government should start by making sure that the almost four-month-old wage strike in the country’s platinum sector comes to an end.
He said if they fail to do this, the economy may not obtain the projected 2% growth by the end of this year.
“Not many countries in the world have had a wage strike that lasts for almost four months,” Meintjes said, adding this was not good for the South African economy going forward.
“All parties should agree to find a way of fixing the wage strike. If the strike continues to take so long to resolve, then there will be no economic growth in the country,” he said.
I think the rest of this year is poised to be an extension of a bleak picture of slow growth and less accommodative policy. This is in view of the fact that I feel the government and the private sector are not doing all they can to try and fix the struggling economy.
An example is that this week, the platinum strike threatened to get out of hand and become bloody. But South Africans have heard very little from government on what needs to be done to avoid further turmoil at the mines.
- Fin24
*Mzwandile Jacks is an independent journalist. Opinions expressed are his own.
