Bokomoso | Making South Africa a competitive player in the Global Economy


Click here to watch this week’s Bokamoso video. 

Our biggest challenge, in moving South Africa forward, is to re-ignite our sluggish economy and reverse our rising unemployment rate.

Unemployment – and particularly youth unemployment – poses the biggest threat to the dream of building a better South Africa with Freedom, Fairness and Opportunity for all.

Last week, I spoke about growing jobs by fostering a culture of entrepreneurship. I explained how we could create the conditions that are conducive to starting and running a small or medium enterprise.

This week, I’d like to focus on how we can make South Africa more competitive in the global economy, and specifically here in the African region. When our exports grow, so does our economy. Facilitating trade should be one of our main priorities.

Some of the fastest growing economies in the world are here in Africa. These are countries that must deal with the same global conditions that are often blamed for our failure to increase our own GDP.

If these countries can grow their economies at over 6 or 7% per year, why are we stuck at 1.4%? And how can we use their growth to our advantage?

The obvious answer is: we should increase our trade into Africa. Fast-growing economies offer huge opportunities for local business to market their goods. But right now, our trade with Africa is hampered by cumbersome and expensive import and export procedures, overly complex customs processes and an unclear trade strategy.

It’s a sad indictment on our government that a country like France does considerably more trade with Africa than we do.

When I speak to business owners, they consistently tell me that it’s just too hard to do business across our borders. It’s difficult to commute in Africa, it’s difficult to get your goods through borders and it’s difficult to set up investments in these countries.

And this is not just anecdotal evidence. The World Bank’s 2013 Doing Business Report ranks South Africa 115th out of 185 countries in terms of the time, cost and documentation involved in trade.

This trade-unfriendly attitude makes no sense when we so desperately need to expand our economy. A DA government would target this through a number of interventions which we could implement without delay.

Firstly, we would improve our trade diplomacy. Unlike the ANC, that often uses ambassadorships to hide loyal but errant officials out of sight, we would ensure that the promotion of trade with South Africa becomes the primary focus of our foreign missions. We would only appoint people with this goal in mind.

Then we would, through agreements with our neighbouring countries, introduce One-Stop Border Posts at each of our international land borders. This would make it easier for goods to go in and out of different countries by expediting the border-crossing process and reducing costs.

When it comes to the importing and exporting goods, our current procedure is far too unwieldy. A DA government would simplify the administrative burden to just three documents: a bill of lading, a customs declaration and a packing list.

Another aspect of ANC policy which we’d need to undo – and the list is growing by the day – is the disastrous new visa regulations, which is seriously hurting tourism as well as business travel to and from our country.

But we’d go even further, by introducing a single SADC tourist visa. This would mean visitors from non-SADC states would be able to travel unimpeded on one visa. Of course, this would go hand-in-hand with strengthened external border posts for us and our neighbours.

In addition to resurrecting our cross-border trade, there are a number of steps we can take to make South Africa a more investor-friendly destination to increase our global competitiveness.

For starters, we must establish multiple “Job Zones” – areas with incentives for foreign investors to locate their factories and production facilities. These incentives would include tax benefits, rebates on municipal services and relaxation of certain labour laws.

On the subject of labour, we’d have to re-look our rigid labour relations. Most investors, local and foreign, list SA’s labour regime among the top three reasons why they won’t invest here. We need to stop the “closed-shop” negotiating system, and we need to introduce democratic reforms to the way unions operate, allowing people to vote on strike action.

Importantly, we also need to increase our labour productivity if we are to compete globally. This will only happen through quality education and through up-skilling until our productivity warrants our wages (as the USA has successfully done in manufacturing and heavy industry).

South Africa can play a leading role in the African economy once more. We can become a beacon of hope in the region, and a vital economic hub. But for this to happen, we need bold leadership and clarity and coherence in our policies.

This is what a DA government will bring. Please help us build the South Africa we all want to live in. Please help us achieve our Vision 2029.

Mmusi Maimane
DA Leader

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