How to save the economy – according to South Africa’s top CEOs

 ·28 Jun 2024

South Africa’s economy is ‘plodding along’, and the chief executives of some of the country’s biggest companies have examined ways to foster economic growth.

According to Stats SA, South Africa’s GDP grew by 0.6% in 2023.

Although the country avoided a technical recession (two-quarters of negative growth) in 2023, it still likely registered a per capita recession as GDP growth could not keep up with population growth.

The start of the year did not start much better, with GDP decreasing by 0.1% in Q1 2024, down from marginal growth of 0.3% in the prior quarter.

South Africa’s economy is expected to improve in 2024, but it still has not shot the lights out.

Bank of America economist Tatonga Rusike expects GDP to grow by 1.3% in 2024, while other economists and analysts expect around 1% growth this year.

CEOs weigh in

Speaking on the Money Show with Bruce Whitfield, Discovery CEO Adrian Gore, Standard Bank CEO Sim Tshabalala, and Investec Bank CEO Cumesh Moodliar looked at what could save the South African economy.

The executives were asked to identify “one thing” that could save the economy, and each delivered a broad but pertinent answer, including:

  • Creating jobs through government reform
  • Building a more skilled and capable state
  • Greater partnerships between businesses and government
Discovery CEO, Adrian Gore

Despite stating that South Africa’s economy is resilient after avoiding a recession in 2023 amid heightened load shedding, Gore said the country needs to create jobs through economic growth.

He said that when the economy grows at 3% or more, there’s only a 0.7% increase in jobs. When the economy is stable or grows at 1%, there is a contraction.

Thus, he believes that the Presidential task team Operation Vulindlela should have a unit focused on economic growth and jobs.

Also highlighting how the narrative around the Government of National Unity has led to a rally in South African assets, Gore said there should be more transparency on plans, which he said can act as a “defibrillator” that turns the economy back to where it should be.

Sim Tshabalala, CEO Standard Bank

Tshabalala agreed with Gore on several aspects and noted that the state also needs to be capacitated and work with civil society and business to accelerate growth.

He called for the acceleration of the Public Service Amendment Bill, which would introduce transparent and competitive recruitment processes in the public service, improve pay, and increase civil servants’ status.

He said South Africa should follow Singapore’s example.

Investec Bank CEO, Cumesh Moodliar

Moodliar also called for greater public-private partnerships (PPPs).

With South Africa’s debt-to-GDP ratio at over 74%, the nation is limited in its ability to raise capital on international markets.

Thus, private capital can be integrated into public-private sector partnerships, highlighting some successful prior examples like the Gautrain and some toll roads.

Moodliar said that PPPs in renewable energy projects and rail and ports could have serious benefits.

In terms of logistics, South Africa already has manufacturers, producers, and miners, but they need mobility to export products to maintain their existing employment levels.

“PPPs lead to infrastructure development, job creation, innovation and technology transfer, skills transfer, improved service delivery, and ultimately revenue generation.

“So, if you take all of those things coming together, it talks to driving that economic flywheel,” said Moodliar.


Read: The two provincial ‘gold mines’ for landlords in South Africa

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