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SA moving to social unrest without strong economic growth

Aug 11 2017 20:07
Carin Smith

Cape Town – Without strong economic growth, indicators are showing SA is moving towards social unrest, cautioned Fred Robertson, executive chair of Brimstone Investment.

"I am led to believe that Sasria is now paying out more claims than they paid out in the 1980s during the revolutionary years. People are dissatisfied – the poorest of the poor," he said as keynote speaker at the annual general meeting of the Century City branch of the Black Management Forum (BMF).

Sasria provides special risk cover against, for instance, civil commotion, public disorder, strikes, riots and terrorism.

He emphasised that investment will boost demand in the economy, with positive effects on employment.

"What drives investment? Investment confidence is the only thing that drives it. I doubt that people are confident. Every day there is a new leak. Do you feel confident when you hear these negative stories about your country? You must feel annoyed if you pay tax and there seems to be a funnel away of the money," said Robertson.

"Investors need policy certainty and continuity. You can't expect a mining company to invest and sink a shaft of R1bn if a minister can fly to Switzerland and say 'you must sell your mine to this person now'. We can't expect somebody to plant a vineyard to grow more grapes if his farm is going to be taken away."
 
South Africans need to find one another to take the country forward, including for those less privileged, according to Robertson.

READ: BMF growls over "useless" Financial Sector Charter

"We have to learn to share with our own people, to bring those marginalised ones into the mainstream economy," he said.

"I am an eternal optimist, but I don’t think our leaders know where we are heading regarding the economy. SA needs strong economic growth to create jobs."

He pointed out that about 5.6 million South Africans are unemployed. That exceeds the combined population of Namibia, Lesotho and Swaziland.

"About half of the 5.6 million unemployed South Africans are our youth. How will they have the money to go and look for a job? To get into a taxi to go and find a job and go for an interview can be quite expensive," said Robertson.

READ: BMF Western Cape honours black excellence

Political uncertainty

Robertson said SA must restore its credibility and creditworthiness caused by political uncertainty and credit downgrades. He heard of many high net worth individuals who are keen to take their money offshore.

"We have a great democracy but we have to make it work and build inclusive growth," he said.

Furthermore, he describes state-owned enterprises as having become "a joke and absolute disaster".

"We are seeing evidence of corruption and the demise of our SOEs. We see it in a lack of delivery. It is not just at the national level," said Robertson.

"There is even much talk that our water crisis in Cape Town is also a problem that was not managed properly."

He said strong leadership is required to address all the challenges in the country.

"The core of the problem is that our political leadership is ill equipped to deal with socio-economic realities. By leadership I don’t only mean of the country. We have to all lead from where we are - in our homes, communities, clubs and associations - if we want to rebuild this society."

He also regards the small business sector as one of the powerful levers that can be used. Mentorship can come in useful in this sector, though, as well as greater understanding about the challenges of access to finance faced by entrepreneurs.

"Early in the start of Brimstone we said what kind of company we wanted to create, one that is profitable, empowering and makes a positive social impact," said Robertson.

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brimstone  |  bmf  |  fred robertson  |  sa economy

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