Wednesday, 14 July 2010

Keeping the momentum of successfully hosting the World Cup

Alec Russell, author of ‘After Mandela: The battle for the soul of South Africa’ opined in the Financial Times that some major reforms are necessary to change the outlook for the South African economy:

With its economy accounting for 27 per cent of sub-Saharan Africa’s gross domestic product, South Africa rightly aspires to be the continent’s hegemon. Yet when analysts speculate about the hot emerging markets of the future they tend first to mention Nigeria, with its 170m people. It is not just that the commodity-dependent South African economy is one-dimensional. It also lacks Nigeria’s entrepreneurial dynamism. Partly this is the fault of apartheid which kept most business in white hands. But the ANC retains an apartheid-era distrust of the private sector.
The last is all the more striking as neighbours to the north race to attract business. One lawyer remarked recently how much easier it had been to complete an electricity deal in Mozambique than with South Africa’s cloying state power company. Some economists even argue provocatively that the country risks lagging behind rather than leading the region. Sub-Saharan economies are expected to grow by more than 5 per cent next year. South Africa has struggled to cross that magic mark, which would enable it to reduce unemployment.
Finance minister Pravin Gordhan has kept the left in check on macroeconomic policy. Trevor Manuel, his prudent predecessor, works into the night planning how to refashion the economy. But Africa requires more of the ANC. It has to jettison the tatty remnants of its nationalist mindset – a shift undertaken in Mozambique, Zambia and elsewhere – and refuse to settle for the country’s spluttering trajectory.

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