Editorial | SA's economy is at a tipping point

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SA's economy is at a tipping point. Picture: iStock
SA's economy is at a tipping point. Picture: iStock

CITY PRESS SAYS


South Africa’s already moribund economy has, like that of many countries, not been spared the additional devastation brought on by the Covid-19 coronavirus pandemic.

The effects are there for everyone to see – rising unemployment, pervasive hunger, shuttered businesses, salary cuts, rising food prices and transport costs, expensive electricity, declining tax revenue and shrinking budgets. There is no doubt that urgent government action and intervention is needed.

It is against this calamitous backdrop that President Cyril Ramaphosa this week delivered the government’s economic reconstruction and recovery plan to both Parliament and the nation.

President Cyril Ramaphosa
President Cyril Ramaphosa. Picture: GCIS

Expectations were high. This was not the time for revolutionary rhetoric or factional ideologies. This was the time for concrete plans; established timelines; clear and achievable goals. The nation waited for a single-minded focus and clear vision.

How disappointing, then, that what was delivered was a rehashed, repetitive and rather tepid list of identified priorities and goals to be achieved – the same goals the country has been chasing for 26 years, with little success.

Read: Opposition parties not impressed by Ramaphosa’s economic recovery plan

Eskom’s instability and massive debt are undermining the country’s growth. The vaunted unbundling is slow and tedious. Independent power producers have yet to come on stream. Investors balk at actively participating if they cannot be guaranteed the resources needed to grow businesses.

Other state-owned enterprises are broke and broken, lining up one by one for hand-outs from Treasury – Denel, the Land Bank, Alexkor, SAA.

Infrastructure development, while a key cornerstone of growth, is not the job-creating panacea everyone may believe it to be. Projects create job opportunities, not jobs. They are temporary. They are poorly paid. They take a long time to come to fruition.

Expectations were high. This was not the time for revolutionary rhetoric or factional ideologies. This was the time for concrete plans; established timelines; clear and achievable goals. The nation waited for a single-minded focus and clear vision

To boot, the country’s mini-budget has been delayed by an additional week, allegedly due to the lack of consensus over where to cut spending and where to boost it. Additionally, the spectre of corruption swirls constantly around the availability of state funds. In the midst of a pandemic, billions meant for the needy and for health were looted.

This is truly South Africa’s tipping point; socially, economically and politically. What has been cannot be what will be or we will fail, locked in a debt spiral and rising social dissatisfaction. Act now.


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