South Africa's Economy in 2014

The South African Economy after the Election 2014

Information taken from “The Star Newspaper” May 12th 2014. It is really fascinating to note that almost 40% of all business people believe that South Africa’s political direction affected their decision after the recent elections and about 65 % were postponing investment decisions as a result of the elections.

In a presentation titled “Some Economic and Business Perspectives on the 2014 Elections” recently held by Business Unity at the University of North West, several warning lights were flashing regarding South Africa’s sluggish economic performance, calling for structural issues to be effectively addressed:

  • Failure to do so will keep the economy at a low-growth trap between 2% and 3% per annum instead of 5.4% which was predicted by the National Development Plan.
  • Business has already started to engage with the NDP but this arrangement needs to be put on fast forwards and widened in the period ahead in view of the National Development Plans vision.
  • There is an urgent call for the critical implementation of the National Development Plan (NDP) so that business can reach its economic potential.
  • Government needs to overhaul its adversarial labour relations scenario which has come to symbolise a distorted economic framework that has benefited relatively few industries and individuals since 1994.
  • The NDP is a very important platform to deal with many issues that have never been addressed correctly or efficiently in the past and present

The tone of the recent elections:

  • The tone of the recent election process showed a dire need to explore an inclusive economic agenda because of the present failure of labour relations.
  • This is most obvious when we have a closer look at the on-going strike in the platinum sector which does not seem to have an end in sight any time soon.
  • The adversarial relations in our country are a good example of a distorted economic framework where large numbers of people continue to feel disregarded.

.It has been suggested that the policy regarding black economic empowerment be relooked at where economic development should embrace practices that give workers a greater stake in the companies they work for (this has been successful with some of the wine producers in the Western Cape).

The policy should push the employee share ownership and worker participation in various shareholding programmes. It should empower people within various enterprises.

Other commentators suggested that SA needs to appreciate that SA is part of a global environment and foreign direct investment would always play a big role in the economic growth of this country.

Suffice to say, South Africa’s political direction was always going to be affected by the elections that took place in 2014.