In the Business Beyond Covid series, CEOs and other business leaders and experts in their sectors look to the future after Covid-19. What effect has the pandemic and resulting lockdown had on their industries and the SA economy as a whole? Which parts will bounce back first and which will never be the same again? Most importantly, they try to answer the question: where to from here?
To grow an economy requires sustained levels of investment of about 25% of GDP. Our current investment level of 19% of GDP is simply too low. To attract investment requires competitive, stable and predictable policy and regulatory frameworks, and a conducive operating environment to be more internationally competitive.
The question is why SA has so little productivity growth and such low investment levels. Total factor productivity growth is weak because a significant share of the economy is not open to competition, and instead is controlled in monopolistic structures owned by the state. The government owns 41% of the fixed capital stock of the economy and these industries are closed to effective private-sector competition .
The starting point in structural reform must be the size of government, which is too large, too cumbersome, and too inefficient, acts as a huge drag on the fiscus and detracts from the competitiveness of the country. Does SA really need three tiers of government? The 1.3-million public servants at provincial and national level account for 35%, or R675bn, of the national budget — and this excludes local government.
Allowing desperately needed investment in private power for self-use and in competition with Eskom would not only diversify supply but materially improve reliability and lower prices. Mining alone has plans for more than 2GW of renewables. Just allowing private competition on electricity, rail and ports would probably improve the potential growth rate by more than two percentage points.
Source: Financial Digest (financialdigest.net)
South Africa Latest News, South Africa Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Source: TheCitizen_News - 🏆 6. / 75 Read more »
Source: TheCitizen_News - 🏆 6. / 75 Read more »
Source: TheCitizen_News - 🏆 6. / 75 Read more »
The SANBS begins research on convalescent plasma for the treatment of Covid-19With no cure for the Covid-19 just yet, the (SANBS) and (WCBS) are exploring ways to use blood plasma as a treatment for local patients. sponsored There are several cures, and president Trump has suggested the use of blood plasma of recovered pasients many weeks ago. Stop playing this pathetic COVID-19 game with us people. We are awake and know what is happening.
Source: IOL - 🏆 46. / 51 Read more »
Running to the now ‘reformed’ IMF would be a mistakeCovid-19 creates an opportunity for the government to act boldly, which includes greater investment in social services and a much larger public sector, writes Dominic Brown Thanks, China, of course you'd say that. IMF will be good for the taxpayer. SA has expenditure problem that needs to be contained. Current policies are unable to do this. IMF needs to be the adult here since leadeship in SA can not be. tito_mboweni how come you never shared articles like this one
Source: BDliveSA - 🏆 12. / 63 Read more »
Australia touts a Rugby Championship ‘hub’Rugby Australia wants to host hub for New Zealand, SA and Argentina teams later in 2020
Source: BDliveSA - 🏆 12. / 63 Read more »