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Second quarter growth in South Africa beat low projections, hitting 1.9% according to latest data from the national statistics agency, setting the stage for 5% annualized growth and a much faster economic recovery from Covid-19 than expected.
The recovery from a 6.4% decline in 2020 was mainly driven by better-than-expected production in sectors such as communications, agriculture and mining. The gradual easing of Covid-19 restrictions after a third wave in June has reopened the economy and renewed optimism about South Africa’s growth path.
“We are not distracted and preoccupied with anything other than economic reconstruction and recovery,” said Pinky Kekana, South Africa’s deputy communications minister, at Brand South Africa’s Nation Brand Forum.
The one-day conference in September brought together business leaders and policy makers to take stock of the South African economy and brand image amid multiple crises, including widespread unrest in July.
Beat the pandemic
Bonang Mohale, president of Business Unity South Africa, said the only surefire way to boost the economy is to beat the pandemic.
“Having vaccinations means we will be competitive worldwide. The country that can claim to beat this pandemic will benefit from tourism demand, ”he said, marking one of the sectors hardest hit by Covid-19.
Phuthi Mahanyele-Dabengwa, CEO of Naspers SA, a global technology investor, said the company is considering making Covid-19 vaccines mandatory for all of its employees. The announcement follows a similar move by Discovery Health, South Africa’s largest health insurer, to enforce vaccinations for employees.
Fight unemployment
In addition to ensuring an adequate rollout of vaccines, Mahanyele-Dabengwa said something needed to be done to tackle record unemployment of 34.4% in the second quarter, a world record. Widespread unemployment is widely believed to be a key factor in the July riots, which began as protests against the imprisonment of former President Jacob Zuma but quickly got out of hand.
The CEO said that while South Africa is a net importer of digital skills, there should be plenty of opportunities for new tech jobs to be created.
Naspers SA has set itself the goal of imparting digital skills to 10,000 young people each year, which can then be used professionally. Apprentices come from a variety of backgrounds, from those with a university to graduates to those who have just graduated from school, Mahanyele-Dabengwa said.
Bottlenecks in mining
Mashudu Netshipale, COO at Kalagadi Manganese, said South Africa is good at making large-scale plans but is struggling to implement.
Two major bottlenecks in the mining industry that have not been addressed despite decades of problems are the lack of reliable power supplies and inadequate infrastructure, the COO said.
“When we think about where we stand for a mining company, infrastructure, electricity and water are crucial,” he said. “Where we are today is that we have regressed.”
As an example, he cited the cancellation of orders from a foundry in Upington, Northern Cape Province, when transport connections fail due to infrastructure problems.
A break in the supply chain can have devastating consequences for everyone involved and quickly bring small foundries into bankruptcy.
The ongoing problems at South Africa’s indebted electricity supplier Eskom make it difficult and expensive for mining companies to maintain normal operations, he said.
Pinky Kekane said the government will focus on “defining the economic recovery plan and setting the tone,” with a particular focus on revitalizing the national brand to attract more investment.
This article was written as part of Brand South Africa’s Nation Brand Forum on September 28th. All editorial content was produced independently of the panel discussions that took place in the forum. Please visit the Brand South Africa website for more information.
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