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Opinionista

With a failing economy, South Africa is not meeting its goals, despite its resources and capabilities

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Bonang Mohale is chancellor of the University of the Free State, former president of Business Unity South Africa (BUSA), professor of practice at the Johannesburg Business School (JBS) in the College of Business and Economics and chairperson of The Bidvest Group, ArcelorMittal and SBV Services. He is a member of the Community of Chairpersons (CoC) of the World Economic Forum and author of two bestselling books, Lift As You Rise and Behold The Turtle. He has been included in Reputation Poll International’s (RPI) 2023 list of the “100 Most Reputable Africans”. He is the recipient of the 2023 ME-Vision Academy’s “Exclusive Recognition in Successful Leadership” award.

Our ambitions for the greater good, common purpose, nation building, social cohesion, inclusion and transformation will not be realised by maintaining the status quo.

Climate action, cybersecurity, food security, energy transition and the healthcare system – these are just five of the many global risks the world is facing. The year ends with an unprecedented two wars unfolding simultaneously – Israel-Gaza and Russia-Ukraine – dragging with them the global economy and a risk that some countries might be sucked into these conflicts! 

The global economy is hit by constrained vital international trade routes in the Panama and 80km Suez canals due to the El Niño-induced worst drought since 1950 and a spate of attacks by Yemen-based Houthi rebels on cargo vessels, respectively. This is already affecting global supply chains in the run-up to the festive season when demand is at a peak. More than half of container shipments by volume, linking Asia and North America, from the Pacific to the Atlantic, was scheduled to cross both canals in the third quarter, with only 167 ships (compared to 238 in the same period last year) crossing in the first week of December. 

The first manifestation of this catastrophe will be an increase in fuel prices. This will put strain on the Strait of Hormuz between the Persian Gulf on the north and the Gulf of Oman in the southeast. The Strait of Hormuz provides the only sea passage from the Persian Gulf to the open ocean and is one of the world’s most strategically important choke points. Oil tankers carry about 17 million barrels of oil each day through the Strait, or 20% to 30% of the world’s total consumption.

In South Africa, despite its enviable mineral resources, highly diversified economy and productive capabilities, State Capture continues unabated, and amid the energy and water crises, the national economy is losing international competitiveness and investment grade, as state capacity collapses. Key sectors like utilities, manufacturing and mining have seen a notable decline, on top of municipal financial distress and spatial exclusion, thereby increasing the cost of capital to the whole economy with little social progress but stubbornly high levels of unemployment which lead to increasing levels of poverty and inequality. 

Read more in Daily Maverick: Scenarios point to a gloomy economic outlook for SA

Read more in Daily Maverick: Gloomy outlook for SA after economy contracts by more than expected in third quarter

As the economy fails and service delivery grinds to a halt, we face deteriorating social indicators and declining levels of public satisfaction with the status quo. The country is not accomplishing its goals of greater good, common purpose, nation building, social cohesion, inclusion and transformation.

So, what needs to be done? 

South Africa can beneficiate its natural resources much more, better leverage its industrialised economy and global trade advantages as significant assets, harness its abundant sun and wind resources, address state capacity and spatial exclusion, revitalise the rural areas and townships by making them more attractive for BIG business owned by local entrepreneurs, because African businesses must ultimately graduate. Progress is impossible without transformation. African people need to lead by example, educate our own children, create our own jobs and support our own businesses. DM

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  • Steve Du Plessis says:

    Get rid of BEE, affirmative action, cadre deployment and our ridiculous labour laws and the country will rocket

  • Kanu Sukha says:

    In the opening observation, the author (like so many others) characterises one of the two wars as between Israel and Gaza . This is incorrect as it is between Israel and Palestinians. That is because Israel (and its various western proxies) would like to divide (the age old divide and rule strategy) the Palestinians into Gaza and the West Bank (with its own internal/local politics). Commentators who make this error, play into the hands of the Israeli regime propaganda . Daily while the genocide of Gazans continue (with the US complicity now of delaying the UN vote on ending the slaughter and starvation of ‘innocents’ – which various IDF/regime spokesmen claim does not exist) there is also a simultaneous and enhanced subjugation and killing of Palestinians in the west bank by the IDF. It is an extension of the subjugation and humiliation of ALL Palestinians that has been in place for at least 50 plus years. I urge all commentators to note this fact and avoid the ‘Gazan’ propaganda of the Israeli regime. They would love for their puppet ‘ruler/authority’ in the west bank to be accorded international recognition, while demonising the one in Gaza.

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