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Opportunities for South Africa’s economic growth lie north of the country’s border, but the private sector will need to be more ambitious and aggressive in order to reap the benefits these present.
A panel of leading economists addressed a recent forum at the Gordon Institute of Business Science on the findings in the McKinsey Global Institute’s publication South Africa’s big five: Bold priorities for inclusive growth.
The report lists five opportunities to accelerate economic growth and subsequently, job creation.
Chief strategist for Citadel Asset Management, Professor Adrian Saville, told the forum: “The most exciting region in the world is on our doorstep and we’re looking right past it.
Dr Lyal White, director of the Centre for Dynamic Markets at Gibs, said South African business had a unique competitive advantage in its geographical positioning, but needed to integrate this with experience gained in the region.
Partner at McKinsey Johannesburg, Christine Wu, said that although the South African economy had strong fundamentals it was stagnating.
South Africa had the potential to become a meaningful player in advanced manufacturing and a global innovator for the local market, with particular focus on pharmaceuticals, agricultural and industrial machinery and chemicals.
Opportunities in the agricultural sector included investing in agro-processing to make local agricultural products more exportable, as well as bringing more productive land into use. Wu explained that positive prospects for the agricultural sector could also have a knock on effect for labour absorption.
Wu concluded that reconfiguring the South African education system to create more trade workers with vocational skills was crucial for the country’s success and would make more people employable and ready to take advantage of economic opportunities.
An improved relationship between the public and private sector was necessary to move South Africa onto a path of accelerated growth in order to undertake a coordinated and sustained effort to raise productivity and strengthen competitiveness.
Another obstacle Abedian said was the current regulatory framework in South Africa: “The regulative framework has become a disruptive force, and policy impact analysis is missing.”
Despite the obstacles, there were opportunities for the country.
“There is no shortage of good ideas, but we need to focus attention on the big initiatives,” Wu said.
“The burden has been put on government to drive growth, but this must be shifted to the private sector and what it can do to grow more aggressively.”
