Watch: Inequality hinders SA’s economic growth
DURBAN - The economic growth that South Africa would like to achieve will never be attained if the country’s level of inequality continued to rise. This is according to the chief executive of Business Leadership South Africa (BLSA), Busisiwe Mavuso.
Mavuso was speaking during a podcast last week that explored the question: “With red tape strangling the economy, can we be hopeful of a post-Covid economic recovery?”
She said the issue of inequality was the “biggest ticking time bomb” in the country.
Mavuso said South Africa was not doing well from an economic perspective and a lot needed to be done to try to turn the situation around.
“We are sitting in a country where poverty levels are about 57% and I’m sure this number has increased looking at the economic devastation imposed by Covid.”
Mavuso said South Africa was also becoming more and more unequal. She said the social ills were a result of social instability.
“The economic growth that we would like to achieve as a country can never be achieved if the country is as unequal as it is. We need to be looking at what are some of those interventions, policies and plans that we need to put in place to solve the inequality problem.”
Using the example of Alexandra township, a stone’s throw away from Sandton, the richest square mile in Africa, Mavuso described what could happen if inequality is not addressed.
"They are not going to continue looking at the opulence of Sandton from the windows of their shacks. Poverty and hunger is going to drive them out of their shacks, across the [M3] bridge and render Sandton ungovernable."
Mavuso said South Africa needed to look at what had to be put in place to prevent this from happening.
She said in terms of unemployment, which was sitting at 42.5%, there were more unemployed people than those in employment in all of the provinces except Gauteng and the Western Cape.
“It doesn't matter which way you choose to look at it, that is a recipe for disaster. What needs to be done and put in place as a country to prevent this looming disaster from happening?”
Mavusa said economic growth would be driven by economic reforms.
“It doesn't matter how much we do on the periphery unless and until we deal with the key reforms that need to be implemented in this country.”