What should South Africa be doing to tackle its long-standing socio-economic problems and build a more resilient future? This was the theme of a virtual think tank via Zoom that was convened by the North-West University (NWU) Business School on 20 August.

With the further easing of the lockdown regulations to Level 2 and business activity picking up, South Africa needs to waste no time in introducing pro-growth reforms to revitalise the economy after the devastation caused by Covid-19.

Yet, South Africa’s problems go back a long way. Covid-19 has simply thrown them into much sharper relief. American business tycoon Warren Buffett’s famous quote, ‘It is only when the tide goes out that you learn who’s been swimming naked’ is an apt description of the extent to which South Africa’s problems prior to Covid-19 were exposed.

Panellists at the think tank, which was chaired by Theo Venter (NWU Business School), were Prof Raymond Parsons (NWU Business School), Prof Thuli Madonsela (Stellenbosch University), Wandile Sihlobo (Agbiz), and Prof Waldo Krugell (NWU).

The think tank also provided the platform for the NWU Business School to discuss a new book, Recession, Recovery and Reform: South Africa after Covid-19 (edited by Prof Parsons and published by Jacana Media).

One of the core messages coming out of the think tank was that the country must now move from plans to action. Strong leadership is needed here. Effective implementation is a process requiring capable leadership at all levels, including the ability to make tough decisions.

Prof Madonsela emphasised that South Africa’s recovery and future well-being centred on the need to create a just society, particularly with the effects of apartheid still being felt to this day. “The past won’t leave us unless we build a society based on the principle of social justice.”

In the debate, it was said that levelling the socio-economic playing fields, however, requires more than redistributing wealth (such as in the social grant system) or introducing one-size-fits-all programmes like black economic empowerment, the benefits of which need to be more widely shared. “Without just capital, no society is stable,” Prof Madonsela added.

Sihlobo spoke of the rich potential of the agricultural sector in South Africa which, though a relatively small contributor to the economy in percentage terms, nevertheless is a significant employer – especially to those residing in rural areas where other types of work are in short supply.

“Agriculture also has significant growth potential, particularly in the agro-processing arena, with many backward and forward linkages,” said Sihlobo. However, the diversity of the
sector, which includes from basic subsistence farming to high-tech, intensive commercial production, complicates policymaking.

Prof Krugell spoke about the need to reduce policy uncertainty, which has long characterised South Africa’s political economy. This makes it difficult for businesses to plan for the future, especially if and where they will invest. Policy uncertainty is a product of political and economic actors pulling in different directions, unable to set a clear course for a better future.

“South Africa is in trouble today because, as a country, we have drifted too far from the fundamentals of efficiency, stability and consistency,” said Prof Parsons. “We urgently need to find ways to reboot the economy, so that it will become a source of sustainable, job-rich growth.”

A challenge that South Africa has long faced is how to arrive at the optimal roles for the public sector and private sectors. “What must the government do? What must the government not do? And what must the government and the private sector do together?” asked Prof Parsons.

While there was much discussion about the need to think out of the box when it comes to reimagining a new and better future for South Africa, what is already in the box is equally important and should be implemented in the meantime.

“In moving to a post-Covid-19 world, South Africa must shape the ‘new normal’, rather than have it imposed,” added Prof Parsons.

Recession, Recovery and Reform: South Africa after Covid-19 is available from all leading bookstores.