CAPE TOWN – Overregulation remains a key threat to the growth of businesses, PricewaterhouseCoopers (PwC) Southern Africa chief executive Shirley Machaba said on Wednesday.
Addressing a briefing at the World Economic Forum (WEF) in Cape Town, she said doing business was a complex problem, particularly for emerging businesses.
She spoke hours after President Cyril Ramaphosa said at a WEF event held by Brand SA that the government intends to make it easier to do business, because while the latest gross domestic product (GDP) data suggested there were “green shoots” of growth, in reality the economy was barely growing at all.
PwC released the results of an opinion survey of more than 170 chief executives in Africa.
Ramaphosa said the investment promotion architecture would be reformed to remove policy, regulatory and other impairments to foreign direct investment, he said.
South Africa ranks 82nd among 190 economies in the World Bank’s Ease of Doing Business Index. Ramaphosa said the government had set a target of reach 50.
Machaba said unemployment was more than 50 percent if one included the youth, and small businesses are the biggest employers in the country.
However, it takes 40 days, on average, to register a business in South Africa where, in many other countries, it can be done in zero to five days.
“Registration of companies, registration for taxes, meeting supply chain management policies, finding joint venture partners, finding emerging firms to be part of your supplier programme, the list just goes on and on,” said Machaba.
Dion Shango, the chief executive PwC Africa, US, said the survey showed that African chief executives were otherwise more moderately optimistic about the growth of their respective economies one year ahead, than their global counterparts, who had shown the sharpest increase in pessimism in 22 years, ever since the survey was started, due to ongoing uncertainties such as the deepening trade war between the US and China and Brexit. A large number of chief executives in Africa reported they did not know where to look for new growth markets, this after traditional growth markets in the UK and Europe and slowed drastically.
Shango said the tragedy of Africa was that it had by far the biggest youth population in the world – many countries suffer from ageing populations – with the highest unemployment rates, but the chief executives of African companies said in the survey that the young people in Africa did not have “the appropriate skills that chief executives are looking for”.
The upskilling of the youth was an issue that both governments and private sector needed to address, he said.
Machaba said other risks to GDP growth in South Africa, as reported by the chief executives, were policy uncertainty, state-owned enterprise restructuring not being finalised, land reform, National Health Insurance social stability and high unemployment.