DURBAN - Crooks needed to be locked up to unlock South Africa’s economic potential. This is the view of economist Dr Roelof Botha, who was the guest speaker at a Durban Chamber of Commerce and Industry business luncheon in uMhlanga on Friday.
Botha and Musa Makhunga, the president of the Durban chamber, believe South Africa is on the brink of a new growth-point and have called for bold, decisive action to reverse the country's misfortunes under Jacob Zuma’s presidency.
Their call follows the South African delegation, led by Deputy President, Cyril Ramaphosa, returning from the World Economic Forum (WEF) annual meeting in Davos, Switzerland, this week with “bags full of investments”. Already, the rand has surged since Ramaphosa was elected
ANC leader last month, paving the way for him to become South Africa's next president. This week it hit a three-year high as it went under R12 to the dollar.
The currency appreciated during the week by 28c (2.3%) to R11.89 to the dollar on Friday afternoon, 49c up from the start of the year. In response, Chris Harmse, chief economist at Rebalance Fund Managers, said: “The positive news of the new Eskom board, the marginal increase in the inflation rate and the expectations for economic recovery voiced at Davos fuelled a recovery in financial markets. “Favourable sentiment around the parliamentary commission of inquiry into the affairs of Eskom and the terms of reference given to the commission of inquiry into state capture add to the currently positive feelings on South Africa.”
From Davos, Ramaphosa said the country's delegation had been praised “for the new era unleashed in South Africa”.
Continued Ramaphosa: “I am leaving Davos... with bags full of investment commitments from our new global partners – investments that will deliver great dividends to our people back home, dividends that will create jobs.” After the WEF meeting with Ramaphosa, International Monetary Fund (IMF) managing director Christine Lagarde said recent initiatives to improve governance and strengthen public institutions in South Africa were steps in the right direction.
“We concurred that long-standing structural challenges continue to weigh on growth in South Africa," said Lagarde. He continued: "We consequently agreed that bold and timely reforms were needed to create an environment conducive to job creation and less inequality.”
Political economist Dawie Roodt of the Efficient Group said while Ramaphosa was doing an excellent job, “the reality is that he is not yet the president and cannot formulate his own policies”. While conceding strides he had made in rooting out corruption in government, Roodt said the damage inflicted on the economy by Zuma’s presidency would take years to repair.
“To address the corruption, maladministration and mismanagement of public funds will not be easy... This is only the beginning.”
Asked what should be done to lure investors, Roodt said: “We have to sort out our politics and what's going to happen with Zuma. No one is going to believe anything we say until we get rid of Zuma and replace him with someone capable of tackling corruption and taking decisions.”
The starting point, said Roodt, was to get rid of incompetent and corrupt leaders at state-owned enterprises and in government. “Overall, I think we have made some progress at Eskom, so that's step number one.” Makhunga said the WEF’s 2018 theme of “Creating a shared future in a fractured world” resonated in South Africa.
“It is appropriate for us because we are in a fractured society that requires a shared future. We need to engage on how we can work with one another so we can start to create a shared future for everyone,” said Makhunga.
Botha said South Africa should also closely watch what happens in Zimbabwe and Angola following the changes in political leadership in both countries late last year.
He said they were now seeking the same foreign direct investment South Africa needed.
“Those countries are now pursuing free market policies. They want investors to come back,” said Botha.
Additional reporting: Philippa Larkin, Kabelo Khumalo, Tawanda Karombo