SA should be worrying about making economy conducive to doing business
Opinion / 3 November 2019, 6:46pm / Victor Kgomoeswana
“It takes over 200 hours to complete export border requirements for maritime transport in Cameroon and Côte d’Ivoire. In contrast, it takes only 10 hours in Singapore. Border compliance costs for export at seaports in Gabon average over $1600, but just over $300 in Mauritius.”
This news is summed up in the World Bank’s Doing Business 2020 report.
South Africa should be worrying about making our economy conducive to doing business. After all, our forecast GDP growth rate has been cut to 0.5% from 1.5%.
A credit rating downgrade is looming, with unemployment reaching record highs and one of the co-stars in last weekend’s social media drama preparing his Medium-Term Budget Policy Statement - against the backdrop of an Eskom, SAA and SABC and other state-owned enterprises lumbering in financial crises.
Instead of threatening South Africans with a bone-breaking Caesar if they do not pay their e-toll bills, the minister of finance and his public enterprises counterpart would do well to make our state bureaucracy deliver services to improve South Africa’s ranking in the World Bank’s Doing Business 2021 report.
The report ranks South Africa 82nd out of 190 countries on the ease of doing business. This is a composite ranking. The overall scoring is based on how easy it is to start a business, get electricity or a construction permit and exporting or importing goods.
The highest ranked country is New Zealand. The more important indicator than the ranking, though, is how a country is improving its position on the charts because that means, overall, things are getting better for business - and consequently for job creation and hopefully improved quality of life. South Africa was ranked 52nd nearly 10 years ago. In the same period, Rwanda moved from the 70s to 29th position.
This year’s most improved countries are Saudi Arabia, Jordan, Togo, Bahrain, Tajikistan, Pakistan, Kuwait, China, India and Nigeria. Surely, if Nigeria can improve its rankings, while warding off attacks by Boko Haram and servicing its more than 150 million people, so can South Africa? We have superior infrastructure in general, a strong judiciary, world-class financial markets and a vibrant democracy. It is our failing exclusive economy that weakens our socio-political stability.
What has been happening at Eskom explains why we are ranked 109th when it comes to getting electricity. We are 106th for getting construction permits. Our racially unequal economy and paralysed state institutions conspire to freeze much-needed infrastructure projects; frustrating our economic recovery even more as we lurch from confession to confession at the Zondo Commission on State Capture.
We are an African country, so comparing ourselves to Singapore or New Zealand while we are being outperformed by Rwanda and Ethiopia on registering a business or running a state-owned airline serves no purpose. We are better than Cameroon, Ivory Coast and Gabon, but the rate at which we are sliding down while they improve should scare us enough to concentrate on better things than what we call talk radio (or tweet) about.
* Kgomoeswana is author of Africa is Open for Business, media commentator and public speaker on African business affairs.
** The views expressed here are not necessarily those of Independent Media.