EY Africa chief executive Ajen Sita says South Africa needs to ‘radically and rapidly’ get its economy working again, with the country facing a number of challenges that need urgent government attention.<\/p>\n
“As the threat of Covid continues to fade – and assuming its greatest threat to lives is behind us – we need to focus on restoration and growth for 2022: for people, for the economy and for businesses.<\/p>\n
“We need to welcome what we expect to be a more stable social and economic environment and use that as a foundation to climb out of the slump of the past two years.”<\/p>\n
Sita cautioned that a key stumbling block was vague government policy on tackling Covid.<\/p>\n
“We need to decide whether we are going for population immunity – which we may have already nearly achieved – or ramp up vaccination efforts once again. We need a clear strategy, and we need it soon.\u201d<\/p>\n
Sita added that transparent Covid policy would also be of great help to corporate South Africa which is still adhering to requirements of the Occupational Health and Safety Act.<\/p>\n
“While the requirements such as temperature checking and screening questionnaires made sense when we were fighting more virulent strains, it has become an onerous and expensive exercise to keep up observing these practices with no end in sight. More certainty for businesses about the future would create confidence to enable planning, spending, and hiring.”<\/p>\n
Energy\u00a0<\/strong><\/p>\n In assessing urgent challenges for the country, Sita said that reliable energy and a settled energy policy remains the core challenge for the government and that until it is addressed South Africa is unlikely to attract much-needed investment or retain highly skilled workers.<\/p>\n “While there have been recent concessions by government to allow private electricity generation there have also been mixed messages. For example, many citizens and businesses have moved to become more energy independent by installing solar power.<\/p>\n “But under Eskom\u2019s new proposed plans for electricity tariffs, this would lead to solar panel users paying more than before, as they would need to pay daily fixed costs to Eskom to be connected to the grid even if they are using their own power.”<\/p>\n Closely related, Sita also noted that the challenges of climate change sustainability have been brought to the fore during the last couple of years.<\/p>\n “South African businesses can no longer see these challenges as a side strategy. Their consideration will be fundamental to how companies operate from now on in a world that is rapidly shifting to regulate and manage carbon emissions as well as other sustainability behaviours.”<\/p>\n Infrastructure\u00a0<\/strong><\/p>\n Sita said that rolling out South Africa\u2019s infrastructure ambitions were now also more pressing than ever.<\/p>\n “Infrastructure needs capital, of which there seems to be plenty of, as well as commitment and skills. While we are inching towards some of the priority projects, we need to speed up to help plug the GDP hole left by lockdowns. These projects will also create large numbers of jobs.<\/p>\n “Better infrastructure will of course, also help boost tourism,” Sita said.<\/p>\n Tourism<\/strong><\/p>\n Sita said that working to revive the South African tourism industry was the most important initiative to boost economic growth.<\/p>\n “South Africa is the largest tourism economy in Africa and s<\/u>upported more than 15 million jobs while adding R500 billion to the economy before the lockdown. Travel restrictions and fears of contracting Covid has had a devastating effect. But as the world opens up again, restrictions in many countries have already been lifted and there is a huge appetite to travel again.<\/p>\n “We need to stand up and wave with both hands to tell people to come and visit,” Sita said.<\/p>\n While overseas tourist numbers to places like Cape Town recovered this holiday season which was encouraging, the country needs global marketing campaigns to grab peoples\u2019 attention.<\/p>\n “Rising numbers of tourists, and particularly more affluent tourists, will have an almost instant impact on job creation that will have a multiplier effect through the economy,” he said.<\/p>\n
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