Second quarter growth in South Africa beat low forecasts to reach 1.9% according to recent data by the national statistics agency, setting the stage for 5% annualised growth and a much quicker economic recovery from Covid-19 than expected.
The rebound, after a contraction of 6.4% in 2020, was mainly driven by better-than-expected output in sectors like communications, agriculture and mining. The gradual easing of Covid-19 restrictions after a third wave in June has led to the reopening of the economy and renewed optimism about South Africa’s growth trajectory.
“We are not distracted and consumed with anything else but economic reconstruction and recovery,” said Pinky Kekana, Deputy Minister in the Presidency, at Brand South Africa’s Nation Brand Forum.
The one-day conference in September brought together business leaders and policymakers to take stock of South Africa’s economy and brand image amid multiple crises that also include widespread riots in July.
Defeating the pandemic
Bonang Mohale, president of Business Unity South Africa, said that the only surefire way to boost the economy is by defeating the pandemic.
“To get vaccinated, that is how we are going to attain global competitiveness. The country that can claim to beat this pandemic will reap the benefits from tourism demand,” he said, flagging one of the sectors most impacted by Covid-19.
Phuthi Mahanyele-Dabengwa, CEO of Naspers SA, a global investor in technology, said that the company is considering making Covid-19 vaccines mandatory for all its employees. The announcement follows a similar move by Discovery Health, South Africa’s largest medical insurer, to enforce employee vaccinations.
Along with ensuring adequate vaccine rollout, Mahanyele-Dabengwa said that something must be done to address the record levels of unemployment that stood at 34.4% in the second quarter, a global record. Widespread joblessness is generally regarded as a key factor behind the July riots which began as protests against the jailing of former president Jacob Zuma but quickly spiralled out of control.
The CEO said that while South Africa is a net importer of digital skills there should be plenty of opportunity to create new jobs in the tech sector.
Naspers SA has set itself that target of teaching digital skills that can then be used in employment to 10,000 young people a year. The trainees come from a variety of backgrounds ranging from those with a university to degree to those who have just left school, Mahanyele-Dabengwa said.
Bottlenecks in mining industry
Mashudu Netshipale, COO at Kalagadi Manganese, said that South Africa is good at making large-scale plans but it struggles with implementation.
Two key bottlenecks in the mining industry that have not yet been addressed despite causing problems for decades are the lack of reliable power and inadequate infrastructure, the COO said.
“If we reflect about where we are for a mining company to run, infrastructure, electricity and water are critical,” he said. “Where we find ourselves today is that we have regressed.”
He gave the example of having to cancel orders from a foundry in Upington, Northern Cape Province, if the transport links go down due to infrastructure issues.
A rupture in the supply chain can have devasting consequences for all parties and can quickly put the small-scale foundries at risk of going bankrupt.
The ongoing problems at South Africa’s debt-ridden electricity provider, Eskom, also make it harder and more expensive for mining companies to maintain normal operations, he said.
Pinky Kekana said that the government will concentrate on “defining and setting the tone for the economic recovery plan”, with a special focus on reinvigorating the national brand to attract more investment.
This article was produced as part of Brand South Africa’s Nation Brand Forum that took place on 28 September. All editorial content was produced independently from panel discussions that took place at the Forum. For more information visit the Brand South Africa website.