JOHANNESBURG - There is no denying that South Africa is confronted with significant economic and social challenges that continue to affect the financial well-being of many households and the achievement of inclusive economic growth.
The poverty gap in the country is widening, with an estimated 30million people living in poverty, high levels of household debts, leaving very little disposable income on which families can survive, let alone save.
The latest figures show that unemployment has risen from 26.7percent in the first quarter of 2018 to 27.2percent in the second quarter, with significant job losses in key sectors such as manufacturing.
This is mainly as a result of companies not investing enough to create more jobs, given the economic and political challenges.
Given the magnitude of these challenges being faced, the time has come to ask whether the myriad of solutions that may have served developed economies and adopted in South Africa with limited success or impact, are still relevant. The argument being put forward, it that this is the time to consider alternative solutions and ideas that can better serve and benefit the country.
For far too long South Africa has looked elsewhere for answers and models and has simply accepted, often with very little questioning, models and ideologies of financial servicing, social insurance and security, and investment and savings strategies that have served the interests of developed-country economies and demographics.
In line with President Cyril Ramaphosa’s rallying cry of “Thuma Mina” ("send me"), we at Alexander Forbes are advocating a new path of constructive and honest dialogue between the public and private sectors on how we might collectively start to address the roots of South Africa’s development challenges in a meaningful way.
To create this alignment we are of the view that we have to recast the narrative and begin with what is uniquely South African about the challenges, and then develop appropriate solutions requiring us to go beyond simply identifying what the barriers have been in the past, but to really start to ask what the future could look like if given the opportunity to reconceptualise an answer from a blank sheet of paper.
In short, we need to:
* Restate the way we measure economic success in a way that reinforces the need for economic growth that is inclusive and sustainable, and directly addresses the current barriers to social mobility for the broader population.
* Reconceptualise the role of the workplace, the employer and the corporation such that these entities play a more effective role in linking the well-being the individual to the well-being of the economy.
* Think more creatively and thoughtfully about the future of finance and how finance professionals could better address issues of funding, wealth creation and social protections that will have the greatest impact on the social mobility of citizens and the inclusive growth of the economy.
* Assess exactly which financial products will have the greatest impact in providing both social protections and social mobility for individuals and families.
These are the issues we have extensively covered in the latest edition of our Benefits Barometer 2018 publication, where we are proposing a return to multi-stakeholder collaborations, but with a very strong caution that unless we keep an eye on decisions which will give us the greatest “multiplier” impact in terms of job creation, skills development and keeping South Africa competitive, this may well be wasted energy.
Dialogue that brings solutions should include job creation, ensuring higher household savings, alongside a focus on sectors which need incentives to achieve growth targets for the broader well-being of citizens.
Getting corporates, employers and pension funds to see the economic value of sponsoring job creation, skills development and the development of SMME supply chains as well as developing a better understanding of how employers can better understand the critical role they play as catalysts for transformation, diversity, inclusion and the reduction of inequality is of paramount importance.
The thesis we are putting forward under the Benefits Barometer 2018 is that South Africa needs solutions and needs them fast.
In doing so we simply cannot afford to ignore the pivotal role that the workplace, the employer and the corporation can play in improving outcomes.
Andrew Darfoor is the group chief executive of Alexander Forbes.
The views expressed here are not necessarily those of Independent Media.
-BUSINESS REPORT