Turn the quango drain into a local investment gem

Given that official statistics have just showed SA sitting with its highest jobless rate in 15 years, Impala Platinum’s news that it plans to shed 13,000 jobs over the next two years could not have come at a worse time. Impala joins other struggling miners set for a painful course of restructuring in the face of metal prices that just fail to ignite. It’s been a decade lost waiting for a return of the good old days, when bad managers could throw double-digit wage increases at workers and China’s growth had no limits.

The closure of five shafts and a reduction of platinum output by 230,000 oz by the world’s second-biggest platinum mining house has been a long time coming, an unfortunate and necessary step to try to jolt that sluggish metal price into life.

What we have to consider is that these jobs may be lost forever, even if China reverts to its growth model of decades past. South African companies that we once relied on to employ a largely unskilled workforce created by an apartheid economic system have learnt to live on lean workforces. And the mass expansion that would make a significant dent in our unemployment rate is nowhere near the horizon. SA’s deindustrialisation in this highly competitive global economy will continue, its pace determined by the levels of policy uncertainty. Right now, they are still elevated.

Before we start bleating about our low skills, the higher-skilled segment remains vulnerable too. SA is also not immune to the job-eroding effects of the fourth industrial revolution. When you see bank ads offering clients the chance to open an account with a selfie, the next question a bank relationship manager should ask themselves is “How much time do I have left manning this fort?”

It does seem like everything is closing in on the economy at the same time. So how do we get out of here, and fast? Deal with the albatross of state-owned enterprises. Bring private sector investment into the most troubled SOEs without losing control. Instead of pleading for loans from our geopolitical partners, we should look to free up space for locals to invest in energy, transport and other sectors dominated by state monopolies.

We have to crack open opportunities for further growth in the South African economy.