Celebrating our democracy, overcoming our challenges
The South African delegation attending the World Economic Forum (WEF) this week in Davos, Switzerland, will not only be flying the flag for South Africa’s 30 years of democracy but will also show how the country is rebuilding its competitiveness in a global economic environment, according to delegation leader and finance minister Enoch Godongwana.
Godongwana will be accompanied by minister of trade, industry & competition Ebrahim Patel, minister of electricity Kgosientsho Ramokgopa, minister of higher education, science & innovation Blade Nzimande, and minister of health Joe Phaahla.
They will be accompanied by a contingent of business leaders and private sector partners who will report on the country’s progress in implementing economic reforms and tackling its just energy transition plan, as well as advancing Africa’s development.
Over the past year, the most significant developments have been the formalised collaboration between the government and business to address the country’s challenges.
Three workstreams were formed to tackle loadshedding, address logistics challenges, and combat crime and corruption. This co-operative effort is already bearing fruit, for example with the finalisation of the freight logistics roadmap by the cabinet late last year.
The theme for this year’s WEF is “rebuilding trust”, and discussions will centre around four critical areas in which South Africa will be able to amplify its voice.
The first is achieving security and co-operation in a fractured world in the face of new and old geopolitical conflicts and deepening political divisions.
Second is creating growth and jobs for a new era as South Africa grapples with high unemployment, arguably the greatest challenge of our democracy.
Third is artificial intelligence as a driving force for the economy and society. This is particularly important as South Africa aims to increase spending on research & development from current levels of 0.6% of GDP, according to Nzimande.
Lastly, discussions will focus on a long-term strategy for climate, nature and energy as the country pursues a just transition and joins the world in the fight against climate change.
One of the major criticisms levelled at South Africa is that the country has good policies but lacks implementation. While this may be valid, it does not paint a complete picture.
Another challenge is that policy development takes an inordinate amount of time to bear fruit.
For example, issues such as digital migration, rail policy, or the energy reforms that were eventually agreed on can be in development for a decade.
However, if a policy takes too long to develop, the conditions for which it was developed may have changed so dramatically that it could be overtaken by events.
South Africa has built up sufficient policy development capacity in both the public and private sectors to overcome these challenges.
One of the key indicators often cited as one of the country’s major weakness is the number of delistings from the JSE.
This is understandably viewed as a sign of deterioration in the investment climate. But that argument ignores certain underlying realities. According to the JSE, the problem of delisting is a global one, but is more prevalent in developing countries.
In South Africa’s case, it affects mainly the small and medium-sized sectors. Yet the local bourse has grown significantly over the past 30 years, with the market cap moving from R800bn in 1994 to the current R19-trillion.
The JSE intends to focus on creating the right conditions to attract quality listings across a range of sectors.
The country’s democratic milestones allow it to reflect on its achievements while confronting challenges. Africa’s most industrialised and diverse economy is underpinned by a healthy revenue collection machinery that raised a gross R2-trillion in the past financial year.
This has allowed South Africa to build what is recognised as the most comprehensive social wage in the developing world to counter the effects of unemployment, malnutrition and poverty.
The challenge now is to navigate an increasingly uncertain environment as the country works towards creating sustainable jobs to reduce dependency on free housing and schooling as well as various types of grants. The solution is within reach, and next week’s forum offers a platform to mobilise the resources to meet these challenges.
The country’s democratic milestones allow it to reflect on its achievements while confronting challenges