Johannesburg - South Africa had to play to its strengths, including roping in the private sector to help turn around the country’s depressed economy, Pan-African Capital Holdings chief executive Iraj Abedian said yesterday.
Its diversity was among the strengths that South Africa could capitalise on, Abedian said, but the mistrust between the private sector and the government was a stumbling block to any progress, which made it difficult for Brand South Africa to promote the country.
Abedian was speaking at Brand SA’s launch of its report, “The 2015 National Brand Index: Perspectives on South Africa’s global reputation”.
South Africa is now perceived to be a less attractive destination for investors because of the volatile labour relations culture, which had manifested itself in the mining sector with the five-month platinum belt strike last year. Uncertainty over policy direction is also a problem.
Abedian said that the country’s “statist policy”, which meant that everything should be done by the state at the expense of the private sector, was a major problem.
“The private sector remains strong in South Africa and has shown resilience, but over the past seven years we have sidelined the private sector,” he said, adding that it was important to play to one’s strength.
He added that President Jacob Zuma’s nine-point state plan to boost the economy, which was tabled during the State of the Nation Address, focused only on the state’s intervention.
“This is the same state that complains of not having enough funds and a lack of skills,” said Abedian.
His comments come as South African business sector optimism has collapsed and surveys have found that businesses are putting off investment decisions due to an uncertain political direction.
Uncertainty
Grant Thornton’s International Business Report’s third-quarter research for the year released last month said that just over half of South African businesses confirmed that uncertainty about the future political direction was impacting business decisions.
Of these 52 percent, nearly two thirds of business executives (61 percent), were putting off investment decisions, as they waited for more stability to come.
Even so, the country was not focusing on its strong sectors that were contributing to job creation, the research said.
“The South African economy was historically associated with mining, but it is less than 6 percent of the gross domestic product. Tourism creates more jobs than mining. Are we taking it seriously? We are not… South Africa is punching below its weight,” Abedian said.
Brand SA’s latest report placed South Africa at 38 overall out of 50 countries meaning that the country has a stable and well balanced brand.
According to the index, the global perception on the country’s immigration and investment was down a notch at 39 out of 50, while exports had remained the same at 36 out of 50.
Brian Currin, the executive director at Concentric Alliance, said that the mistrust between governments and the private sector was a hindrance to projects around the world.
“If you think about projects that fail around the world, it is because there is not trust between the government and the private sector,” said Currin.
BUSINESS REPORT