Economists blame state for economy

Statistics South Africa latest unemployment statistics yesterday had economists pointing to the role of the state in the failing economy, with one blaming the “destructive government”.

Statistics SA yesterday announced the unemployment rate rose by 0.3 of a percentage point to 27.5% in the third quarter of this year.

It also announced that 6.2 million South Africans of working age were unemployed in the third quarter.

Economist Dawie Roodt said the population was growing much faster than the economy, so the increase in unemployment was inevitable.

“The country is currently in a recession, with an economy that is currently growing at a rate that’s less than 1%.

“We also have to look at how the people who are employed are becoming more productive, with a productivity rate growing at just 1%.

“The SA economy needs to grow at roughly 3% to keep it constant but unfortunately, at this rate it will not and this means South Africans are getting poorer.”

Roodt added: “One of the many reasons this is happening is because of the quality of our government, which is very destructive and not doing what it is supposed to do.

“For the private sector to grow the economy they have to be given private property rights protection, which is the job of the government.

“However they haven’t been given this, which is part of the reason that the economy is growing at a rate that is below its potential.”

Economist Dawie Klopper agreed: “We need at least 4% growth to get out of the woods and until then we will not be able to stop the unemployment rate increasing.

“To get to the 4% increase we need to implement the changes proposed by President Cyril Ramaphosa in his State of the Nation address and the medium-term budget policy statement by Minister of Finance Tito Mboweni.”

Economist Mike Schussler said to create more job growth, South Africa had to be more business friendly.

“At the moment, with terms like ‘white monopoly capital’ and all the investigations carried out by the Competition Commission, we are not there yet.

“As a country we have to deal with business uncertainty and make sure that people understand not just labour laws, but laws to allow for more flexibility in business.

“We also need more government involvement and for them to be more lenient towards small businesses.”