{"id":583260,"date":"2022-05-05T08:48:57","date_gmt":"2022-05-05T06:48:57","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=583260"},"modified":"2022-05-05T08:48:57","modified_gmt":"2022-05-05T06:48:57","slug":"5-things-that-will-make-or-break-south-africa-in-the-next-few-years","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/583260\/5-things-that-will-make-or-break-south-africa-in-the-next-few-years\/","title":{"rendered":"5 things that will make or break South Africa in the next few years"},"content":{"rendered":"<p>Credit rating agency Moody\u2019s has forecast that South Africa&#8217;s economy will grow by about 1.5% over 2022-23, constrained by a rigid labour market, weakening competitiveness and decaying infrastructure.<\/p>\n<p>The electricity sector poses the greatest risks to economic growth prospects, with generation capacity already insufficient to cover the economy&#8217;s needs, the group said in a research note on Wednesday (4 May).<\/p>\n<p>&#8220;The current administration, which came into power in 2018, has introduced some measures to address structural growth constraints, but the latter remains a challenge. Socioeconomic pressures and institutional weaknesses also complicate the government\u2019s efforts to introduce reforms. As a result, growth has continued to underperform other emerging market economies,&#8221; it said.<\/p>\n<p>Moody\u2019s noted that the longer-term growth outlook will depend on the extent to which the government is able to advance its sectoral reforms, especially those aimed at rehabilitating electricity capacity.<\/p>\n<p>The group identified five key areas of concern and what the government needs to do to address these issues.<\/p>\n<hr \/>\n<p><strong>Land reform<\/strong><\/p>\n<ul>\n<li><strong>Reform objective:<\/strong> Allow land restitution and redistribution, including through expropriation without compensation, but spare the economy by focusing on unexploited lands or unrightfully seized lands.<\/li>\n<\/ul>\n<ul>\n<li><strong>Credit view:<\/strong> Positive, because it supports social cohesion and growth. But until fully implemented in a way that ensures respect for the economic objectives, this is a source of uncertainty.<\/li>\n<\/ul>\n<ul>\n<li><strong>Progress:<\/strong> Initial public consultations closed. Expropriation Bill drafted and promulgated on 9 October 2020, mandating a compulsory, uniform expropriation process, just and equitable compensation and a possibility of non-compensation in specific cases.<\/li>\n<\/ul>\n<hr \/>\n<p><strong>Regulation<\/strong><\/p>\n<ul>\n<li><strong>Reform objective:<\/strong> Increase competition and remove barriers to entrants, especially in the services sectors (tourism, retail, financial services, network industries).<\/li>\n<\/ul>\n<ul>\n<li><strong>Credit view:<\/strong> Positive, but progress on reforms is difficult to track, both in terms of implementation and effectiveness.<\/li>\n<\/ul>\n<ul>\n<li><strong>Progress:<\/strong> General measures include a new competition bill (February 2019), modernisation of the foreign exchange control regulation (2020 budget), a new industrial master plan and an initiative to reduce the regulatory burden for SMEs, and increase access to financing. Sector-specific measures include an easing of the visa regime (e-Visas), the allocation of new spectrum licenses and measures to encourage competition in the retail sector.<\/li>\n<\/ul>\n<hr \/>\n<p><strong>Labour market<\/strong><\/p>\n<ul>\n<li><strong>Reform objective:<\/strong> Boost employment in the public sector and reduce skills mismatch by adapting education and training programmes.<\/li>\n<\/ul>\n<ul>\n<li><strong>Credit view:<\/strong> Measures not commensurate with the scale of the issue.<\/li>\n<\/ul>\n<ul>\n<li><strong>Progress:<\/strong> Initiatives remain very demand-driven and aspirational in terms of the number of jobs to create (e.g. via the creation of a jobs summit, tax incentives to high young professionals).<\/li>\n<\/ul>\n<hr \/>\n<p><strong>Electricity<\/strong><\/p>\n<ul>\n<li><strong>Reform objective:<\/strong> Unbundle Eskom, increase efficiency, shift toward greener energies, procure additional electricity capacity.<\/li>\n<\/ul>\n<ul>\n<li><strong>Credit view:<\/strong> Positive, as it would support growth and confidence, and reduce the government&#8217;s contingent liabilities.<\/li>\n<\/ul>\n<ul>\n<li><strong>Progress:<\/strong> Process ongoing. Transmission is due to be unbundled in 2022 as an initial step. Independent Power Producer framework completed.<\/li>\n<\/ul>\n<hr \/>\n<p><strong>Mining<\/strong><\/p>\n<ul>\n<li><strong>Reform objective:<\/strong> New mining charter.<\/li>\n<\/ul>\n<ul>\n<li><strong>Credit view:<\/strong> Neutral, as it provides stability for the mining sector, but is not a game-changer.<\/li>\n<\/ul>\n<ul>\n<li><strong>Progress:<\/strong> Completed, but pending legal actions.<\/li>\n<\/ul>\n<hr \/>\n<p><strong>Corruption<\/strong><\/p>\n<ul>\n<li><strong>Reform objective:<\/strong> Boost confidence and improve efficiency in the public sector.<\/li>\n<\/ul>\n<ul>\n<li><strong>Credit view:<\/strong> Positive, although it will take time to yield results.<\/li>\n<\/ul>\n<ul>\n<li><strong>Progress:<\/strong> The Zondo Commission (the judicial commission of inquiry into allegations of state capture) has been dissolved. The Commission is in the process of publishing its findings in a three-part report. No individual has been convicted.<\/li>\n<\/ul>\n<hr \/>\n<p><strong>Read: <a href=\"https:\/\/businesstech.co.za\/news\/finance\/583186\/ratings-agency-delivers-inflation-warning-for-south-africa\/\" target=\"_blank\" rel=\"noopener\">Ratings agency delivers inflation warning for South Africa<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Credit rating agency Moody\u2019s has forecast that South Africa&#8217;s economy will grow by about 1.5% over 2022-23, constrained by a rigid labour market, weakening competitiveness and decaying infrastructure.<\/p>\n","protected":false},"author":10,"featured_media":498973,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[26],"class_list":["post-583260","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/583260","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/10"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=583260"}],"version-history":[{"count":7,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/583260\/revisions"}],"predecessor-version":[{"id":583302,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/583260\/revisions\/583302"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/498973"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=583260"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=583260"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=583260"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}