Collaboration and sustainability are the way forward for the South African economy
As South Africa looks to turn a corner on a particularly turbulent period for its economy, experts and stakeholders from the policy and business environments alike are debating the best direction and priorities that the country should have going forward – this according to a new report from FTI Consulting.
The global business advisory firm has compiled a comprehensive body of analysis, drawing on experts within its ranks as well as senior executives from business and government. The analysis is fed by expertise from all of FTI’s major verticals, including economics, public policy, corporate finance and strategic communications.
FTI’s economic expertise is particularly comprehensive at the moment, given that the firm’s South Africa practice recently absorbed the entire team of economics consultancy Econex. The new report titled ’Future of South Africa’ examines a wide range of potential trends and indicators in the country.
South Africa’s economy has struggled significantly in recent times, particularly since 2014 when global oil & commodity prices dipped, denting revenues in some of the country’s most crucial sectors. Since then, a number of recommendations have emerged from all walks asto how the economy should progress.
General consensus has been that the future of the country depends on the ability of stakeholders in the economy to collaborate across sectors and government to agree on certain priorities. As per the analysis, the prospects of such a collaborative environment appear increasingly promising.
FTI’s report states, “in true South African spirit, there remains a sense of determined optimism. Finding solutions to South Africa’s challenges will require compromise and a meeting of minds between public and private sector players.” There appears to be willingness to realise this scenario.
The second consensus has been that innovation is an absolutely crucial aspect the future growth. One positive that many experts draw on is the fact that the country is rebuilding its economy at a time when disruptive changes are transforming economies across the globe, allowing South Africa to learn from the mistakes of others.
As a result, a focus on technological integration has been amongst the key priorities, while the administration’s focus has been on drawing as much foreign investment as possible. By 2024, the country hopes to have drawn as much as $100 billion in the form of foreign direct investment.
FTI’s analysis has shown that these indicators are instilling hope in the country’s business environment, although the optimism remains of the cautious nature. One reason for this is the determination to ensure that growth in the country leads to a degree of equity across various segments.
Cueently, South Africa has among the highest unemployment rates in the world, a problem that only appears to be getting worse. The rate went up from 31% in 2008 to 37% last year, which is causing concern amongst policy makers in the country. The inequality doesn’t just stop there.
The report details how South Africa has a highly unequal profile on the global scenario, in terms of race and gender, amongst other indicators. These are historically complex issues that have economic repercussions, and working through them is increasingly a priority.
“South Africa faces a watershed moment. Against the backdrop of political uncertainty, subdued economic growth and major challenges such as unemployment and an energy crisis, our country faces a choice. This choice - between a high road to sustainable growth and prosperity or a low road to slow economic erosion – will determine the future of South Africa for generations to come,” summarised Petrus Marais, Senior MD and Head of FTI South Africa.
