In April, SA celebrates 27 years of a strong democracy that has brought political freedom for its people. However, despite structural reforms across all fronts, including in economic policy, the majority of South Africans continue to live in poverty and inequality remains a challenge. Unemployment is at a record 32.5%.
Jobs continue to be lost, with the rising industrial cost base making the sector uncompetitive in terms of trade, and too unsustainable to invest in. This has defeated the purpose of the economic renewal process since 1994. How, then, does the country move forward from here? Credit should be given to the government as it has continued to set aside funding for public-sector infrastructure spending, with R791.2bn earmarked for the next three fiscal years. However, a significant amount of this — 37% — will be implemented through state-owned enterprises that are under scrutiny for past mismanagement. Reforming these SOEs to ensure they deliver on their mandate is key.
A key milestone in the past 27 years from an economic perspective remains the awarding of a major international tournament for the first time to Africa and to SA. This was the 2010 Fifa World Cup. The process leading up to the football competition taught us that, to be on par with other countries that have hosted such tournaments, we needed supporting infrastructure and industries to construct that infrastructure.
SA’s global trade position, particularly within the M&E sector, is worrying. From 1995 to 2020 the country’s net trading position in the sector has averaged -R55bn, reflecting a bias towards being an importer rather than exporter. This alone sums it up: the ambition to become an export-orientated industry is yet to be realised in the M&E sector. Imports continue to dominate the local market base.