South African leaders bemoan economic uncertainty
South African business leaders have named national economic uncertainty as the main economic challenge affecting business for the sixth consecutive year, according to a confidence index compiled by the Institute of Directors in South Africa.
While the survey of 480 directors from the private, public and nonprofit sectors and small and medium-sized businesses took place from January 25 to February 19 – when authorities tightened restrictions on coronaviruses amid a second wave of infections – Economic conditions were consistent with pre-pandemic perceptions, the group said.
Gross domestic product rose 2% on an annualized basis in the three months to June compared to the previous quarter, according to a median of estimates from 10 economists in a Bloomberg survey ahead of data released next week.
That, coupled with the deadly riots, looting and arson that erupted in July, will weigh on the recovery of an economy that contracted the most for at least 27 years in 2020.
Even before the pandemic, South Africa was stuck in its longest cycle of decline since World War II and the economy has not grown by more than 3% per year since 2012.
The government has officially adopted five plans to boost GDP growth and job creation since the African National Congress won the first multi-ethnic elections in 1994. However, most policies have been blocked by powerful vested interests.
Certain reforms proposed two years ago in a policy document of the National Treasury, which should increase growth by two to three percentage points, and the economic reconstruction and recovery plan unveiled by President Cyril Ramaphosa in October to revive the economy after the damage caused by the virus, are only now starting to show progress.
These include obtaining electricity from independent power producers and taking measures to reduce congestion in ports.
Read: Fourth wave of Covid-19 and restrictions during summer in South Africa will depend on vaccinations: Ramaphosa