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BEE noble, but open doors for job creation first - economist

FIN24 / 22 FEBRUARY 2019 - 18.22 / CARIN SMITH

It is noble to ask companies considering doing business in SA how many black women, for instance, they plan to have in the executive or on the board – but the SA government must get them to come here and create jobs in the first place.

This was the view shared by Nedbank economist Busisiwe Radebe at a post-Budget 2019 briefing hosted by Deloitte Africa in Cape Town on Friday.

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Radebe believes ease of doing business is a key consideration for economic growth.

'Don't slice the pie - bake more pies'

"We need to get more jobs going and the only way to do that is for government to relax onerous rules and roll out the red carpet by making it easier to open businesses in SA," she commented.

"To get the economy to grow faster, we have to – instead of taking the pie and trying to slice it up into little bits – bake more pies."

Cut red tape

Asked what she would do if she were in the shoes of Finance Minister Tito Mboweni or President Cyril Ramaphosa, she said she would look at cutting red tape for business.

"To renew economic growth, private sector investment must be strengthened, but it seems just like a lot of talk taking place, but no implementation," she said.

In her view, union rules need to be "fixed" too.

"While we must still have basic conditions of employment, we must relax labour rules to make it easier for employers to hire and fire workers," she suggested.

"The economy is not growing, which means jobs are not being created. At the same time, SA's social environment means government also has to spend in this area. The macro-economic environment, therefore, does not help SA and we are literally stuck between a rock and a hard place."

Policy certainty

Furthermore, she said the impact of policy uncertainty is reflected in the lack of business confidence in the country and the lack of private sector spending.

"We had a horrid 10 years and it will take time for government to be trusted again. Taxpayers want to see bang for their buck, so it is a moral thing for them to want to see how their taxes are used by government," said Radebe.

"Things are not looking that great. We are going to have to make structural changes, but I do not think the political will is there to do this at the moment, as it will require bold decisions to turn things around."

Ratings woes

In her view, Budget 2019 is not election friendly, because it acknowledges the need to cut the public sector head count and curb government's expenditure on staff.

"The main thing this budget was supposed to do, was to make sure we do not get downgraded by Moody's. Yet, if I were Moody's, I would downgrade SA," she said.

"Mboweni said he did the best he could with what he had. Moody's will probably look at that and hold fire for now. But if we do not implement what we said we would about Eskom, then Moody's would have to downgrade us. But I think nothing will happen regarding ratings until after the elections."



Disclaimer - The views expressed here are not necessarily those of the BEE CHAMBER

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