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The question on everyone's lips these days is how to fix South Africa's economy which has been struggling for years on end now. South Africa's economy has been growing at rates well below its population growth as well as well below the growth rates of its BRICS peers and some of its peers on the African continent. So why is South Africa's economy struggling so much and how can this be fixed relatively easily?
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Main problems holding back the South African economy
Before taking a look at possible ways in which to fix South Africa's economy one has to ask why is South Africa's economy not growing at rates expected or seen by other countries? What is it that is holding back South Africa's economy? Sadly for South Africans the list of problems with South Africa's economy is so long that we might never finish this article of we highlight all the problems with South Africa's economy. So we will look to highlight the main problems with the South African economy and then look at ways to address these problems.
So the main problems holding back the South African economy?
1. Restrictive labour laws and unemployment
South Africa's labour laws makes it extremely hard to to "hire and fire" job seekers easily. Due to policies such as employment equity or BEE companies are often forced to employ individuals who are not the best candidate for the job in order to make up numbers to comply to certain government prescribed numbers. While we are all for corrective policies to fix the ills of apartheid, when firms are forced to employ candidates who might not be the best candidate for the job it affects firms productivity and profitability.
But this is not the biggest labour law issue in South Africa. The fact that South African laws makes it so hard to get rid of non performing employees and the way corporate entities believe employment laws tend to favour employees instead of employers makes firms think twice before employing more people and in other cases if they want to even open up operations in a country where the labour laws tend to favour employees instead of employers.
If it becomes to hard to employ the best candidates or to get rid of non performers why bother at all? This is what a lot of companies are thinking and it might be hold back a large number of firms of coming to or expanding in South Africa. And this has an impact on South Africa's unemployment rate which is hanging around record levels of over 27%.
South Africa's economy due to its slow growing nature is struggling to create jobs for those that are unemployed and for those entering the job market. We recently showed that over 3 million youths (between the ages of 16-24) find themselves in NEET. NEET is defined as not in employment education or training. A frightening number for students looking to enter the South African job market.
2. Poor economic policy by government
When you looking to grow the economy and you portray your country as "open for business" and looking for foreign direct investment (FDI) but you as the ruling party of the South African government go on and on (especially during elections campaigns) about expropriating land without compensation (basically saying you will take land or assets from others without paying for it) you cannot truly expect foreign investors/businesses or local investors/businesses to invest in fixed assets (such as land, machinery and equipment etc). So until greater policy certainty is provided by government it cannot expect businesses be it local or foreign or investors (local or foreign) to invest in new assets in South Africa when they feel there is a risk that these assets might be taken without being compensated for it.
3. Poor policy implementation or government red tape
This is another sticking point. Loads of great policies have been cooked up over the years by the South African government but the implementation thereof has not always been great. Or the implementation of policies tends to involve a lot of red tape (or government bureaucracy) which tends to scare off a lot of people and businesses. The effort in complying tends to outweigh the promised benefits.
4. Poorly run state owned companies (SOC)
When various state owned companies own the major infrastructure of a economy and it is not run optimally your economy wont run optimally. It is as simple as that. ESKOM owns the national power grid, and we know they in a world of trouble and its a constant struggle for them to keep the lights on in South Africa. ESKOM has mountains of debt ir racked up over the years with it building Kusile and Medupi power stations and paying all sorts of payouts to corrupt officials and in corrupt deals, which inevitably lead to ESKOM paying more for coal than they should in a lot of instances due to corrupt tenders and deals. In addition to this ESKOM has a massive work force which by all accounts are grossly overpaid. The problem is as we mentioned earlier it it very hard to reduce this workforce. And if ESKOM gets rid of the excess employees there is nothing stopping them from sabotaging the national power grid in revenge. We have seen this in the past with ESKOM that as soon as there are wage negotiations or other negotiations taking place between unions and ESKOM there tends to be more grid problems as striking employees attempt to sabotage the power grid and strong arm ESKOM into giving into their demands.
Transnet and PRASA basically owns all the rail networks and trains running on South Africa's railways. So if this is not run efficient and effectively then people and goods being moved on the railway tracks aren't moved efficiently either. And this is a massive problem in South Africa. With so many people dependent on trains as their main mode of transport the constant delays and slow and inefficient service of passenger trains are affecting productivity of South Africans and it takes valuable time out of South Africans day waiting for trains or riding slow trains when they could be spending it at the office, with their families or doing something else that is more productive to society.
5. Over taxed population
We have discussed this numerous times on this website in the past. In essence South Africa has 4.5 million personal income tax (PIT) payers, yet South Africa has 17 million people living off social grants. South Africa's personal income tax levels are high, corporate income tax levels are high, Value added tax was increased a few years ago, punitive taxes such as fuel levies, or toll roads keeps rising, as well as taxes on alcoholic beverages and tobacco.
Dividend income and interest earned in income is taxed. Import duties on a large number of products in South Africa. Transfer and estate duties on properties and other assets etc. It is said only two things in life are certain, and they are death and taxes. In South Africa it seems the South African government is looking to tax its citizens to death
6. Corruption
With the current state capture inquiry going in it is clear that the scale of corruption and funneling of state funds away from its intended use into the pockets of a connected few is far larger than initially thought. The total sum of which will probably never really be known. But the sheer size of it is enough to have one of the South African Reserve Bank deputy governors state the problem being far greater than ever expected. This funneling funds away from infrastructure and community projects has taken a significant amount of money away from the economy and the community and the compounding impact these investments would and could have had on the South African economy is not being felt.
If government is serious about economic growth and prosperity in South Africa it needs to address the large scale corruption going on in South Africa in not only the public sector but also the private sector which has been hit by numerous financial scandals such as Steinhoff and Tongaat-Hullet in which financial statements were misrepresented for years.
The private sector financial chinigans and public sector corruption has a significant impact on investor confidence and sentiment in South Africa and is keeping investments away from the economy
1. Restrictive labour laws and unemployment
South Africa's labour laws makes it extremely hard to to "hire and fire" job seekers easily. Due to policies such as employment equity or BEE companies are often forced to employ individuals who are not the best candidate for the job in order to make up numbers to comply to certain government prescribed numbers. While we are all for corrective policies to fix the ills of apartheid, when firms are forced to employ candidates who might not be the best candidate for the job it affects firms productivity and profitability.
But this is not the biggest labour law issue in South Africa. The fact that South African laws makes it so hard to get rid of non performing employees and the way corporate entities believe employment laws tend to favour employees instead of employers makes firms think twice before employing more people and in other cases if they want to even open up operations in a country where the labour laws tend to favour employees instead of employers.
If it becomes to hard to employ the best candidates or to get rid of non performers why bother at all? This is what a lot of companies are thinking and it might be hold back a large number of firms of coming to or expanding in South Africa. And this has an impact on South Africa's unemployment rate which is hanging around record levels of over 27%.
South Africa's economy due to its slow growing nature is struggling to create jobs for those that are unemployed and for those entering the job market. We recently showed that over 3 million youths (between the ages of 16-24) find themselves in NEET. NEET is defined as not in employment education or training. A frightening number for students looking to enter the South African job market.
2. Poor economic policy by government
When you looking to grow the economy and you portray your country as "open for business" and looking for foreign direct investment (FDI) but you as the ruling party of the South African government go on and on (especially during elections campaigns) about expropriating land without compensation (basically saying you will take land or assets from others without paying for it) you cannot truly expect foreign investors/businesses or local investors/businesses to invest in fixed assets (such as land, machinery and equipment etc). So until greater policy certainty is provided by government it cannot expect businesses be it local or foreign or investors (local or foreign) to invest in new assets in South Africa when they feel there is a risk that these assets might be taken without being compensated for it.
3. Poor policy implementation or government red tape
This is another sticking point. Loads of great policies have been cooked up over the years by the South African government but the implementation thereof has not always been great. Or the implementation of policies tends to involve a lot of red tape (or government bureaucracy) which tends to scare off a lot of people and businesses. The effort in complying tends to outweigh the promised benefits.
4. Poorly run state owned companies (SOC)
When various state owned companies own the major infrastructure of a economy and it is not run optimally your economy wont run optimally. It is as simple as that. ESKOM owns the national power grid, and we know they in a world of trouble and its a constant struggle for them to keep the lights on in South Africa. ESKOM has mountains of debt ir racked up over the years with it building Kusile and Medupi power stations and paying all sorts of payouts to corrupt officials and in corrupt deals, which inevitably lead to ESKOM paying more for coal than they should in a lot of instances due to corrupt tenders and deals. In addition to this ESKOM has a massive work force which by all accounts are grossly overpaid. The problem is as we mentioned earlier it it very hard to reduce this workforce. And if ESKOM gets rid of the excess employees there is nothing stopping them from sabotaging the national power grid in revenge. We have seen this in the past with ESKOM that as soon as there are wage negotiations or other negotiations taking place between unions and ESKOM there tends to be more grid problems as striking employees attempt to sabotage the power grid and strong arm ESKOM into giving into their demands.
Transnet and PRASA basically owns all the rail networks and trains running on South Africa's railways. So if this is not run efficient and effectively then people and goods being moved on the railway tracks aren't moved efficiently either. And this is a massive problem in South Africa. With so many people dependent on trains as their main mode of transport the constant delays and slow and inefficient service of passenger trains are affecting productivity of South Africans and it takes valuable time out of South Africans day waiting for trains or riding slow trains when they could be spending it at the office, with their families or doing something else that is more productive to society.
5. Over taxed population
We have discussed this numerous times on this website in the past. In essence South Africa has 4.5 million personal income tax (PIT) payers, yet South Africa has 17 million people living off social grants. South Africa's personal income tax levels are high, corporate income tax levels are high, Value added tax was increased a few years ago, punitive taxes such as fuel levies, or toll roads keeps rising, as well as taxes on alcoholic beverages and tobacco.
Dividend income and interest earned in income is taxed. Import duties on a large number of products in South Africa. Transfer and estate duties on properties and other assets etc. It is said only two things in life are certain, and they are death and taxes. In South Africa it seems the South African government is looking to tax its citizens to death
6. Corruption
With the current state capture inquiry going in it is clear that the scale of corruption and funneling of state funds away from its intended use into the pockets of a connected few is far larger than initially thought. The total sum of which will probably never really be known. But the sheer size of it is enough to have one of the South African Reserve Bank deputy governors state the problem being far greater than ever expected. This funneling funds away from infrastructure and community projects has taken a significant amount of money away from the economy and the community and the compounding impact these investments would and could have had on the South African economy is not being felt.
If government is serious about economic growth and prosperity in South Africa it needs to address the large scale corruption going on in South Africa in not only the public sector but also the private sector which has been hit by numerous financial scandals such as Steinhoff and Tongaat-Hullet in which financial statements were misrepresented for years.
The private sector financial chinigans and public sector corruption has a significant impact on investor confidence and sentiment in South Africa and is keeping investments away from the economy
7. Contractionary fiscal policy
While government spending has been increasing in recent years (which is seen as expansionary fiscal policy) as we mentioned the other day on our Fiscal Policy page, while spending from government has increased, so has the taxes being charged in South Africa, which takes money away from consumers and businesses. So the net effect of increased government spending and increased taxes could actually be negative (contractionary fiscal policy) as the effect of higher taxes might outweigh the increased government spending. So South Africa has an intended or unintended contractionary fiscal policy just by having higher taxes even though government thinks its fiscal policy is expansionary because it is spending more
8. Contractionary monetary policy
We have written about South Africa's monetary policy extensively recently. And this is largely due to the fact that do not believe South Africa's interest rates should be as high as it currently is. We do not trust the inflation forecasts made by the South African Reserve Bank Monetary Policy committee (SARB MPC) and their quarterly projections model (QPM). Their inflation expectations survey is also skewed to the upside as they survey labour unions which will ALWAYS expect higher inflation as the higher the inflation expectations the higher the percentage of wage increases they can bargain for their members. We showed recently South Africa's interest rates should be at least 225 basis points lower than the current rate of 6.75%. According to Taylor's rule and our estimates of it South Africa's repurchase rate (REPO) should be at 4.5% and not 6.75%.
The current MPC is so fixated on inflation targeting that they seem to have forgotten the part of their mandate which states price/currency stability in the interest of sustainable growth. Well the economy is not growing, so while inflation is well within the 3% to 6% target of the Reserve Bank it is time to relax the inflation targeting and focus on the sustainable growth part of their mandate. High and increasing interest rates (our last interest rate move was in increase in November 2018) or contractionary monetary policy will not assist economic growth. Why keep interest rates high when the economy is struggling and inflation is well within the target band? It seems like the bank is taking a hardline against decreasing interest rates for fear of being seen as no longer independent or being influenced by politicians and pressure groups. Some might see it like this if interest rates were to come down, but the bulk of South Africans will see it as SARB taking steps to assist in reviving South Africa's economy. Time the inflation hawks are removed from the MPC and they be replaced by those with more moderate views on inflation and stronger views on balanced and sustainable growth in South Africa.
9. Stimulate local manufacturing industry
It has become the norm these days for firms (both local and foreign firms operating in South Africa) to import goods from countries such as China instead of using local manufacturers to supply goods. While this has the benefit of providing a greater variety of products and often cheaper prices for end consumers, the big drawback is that it is slowly killing the local manufacturing industry (which in 1994 contributed about 20% to South Africa's economy), with manufacturing now contributing less than 14% to South Africa's economy. It is an industry in continued decline in South Africa and it carries with it massive job losses. As we showed in last week, the clothing and textiles manufacturing in South Africa loses roughly 577 employees a quarter (over the last decade).
While government spending has been increasing in recent years (which is seen as expansionary fiscal policy) as we mentioned the other day on our Fiscal Policy page, while spending from government has increased, so has the taxes being charged in South Africa, which takes money away from consumers and businesses. So the net effect of increased government spending and increased taxes could actually be negative (contractionary fiscal policy) as the effect of higher taxes might outweigh the increased government spending. So South Africa has an intended or unintended contractionary fiscal policy just by having higher taxes even though government thinks its fiscal policy is expansionary because it is spending more
8. Contractionary monetary policy
We have written about South Africa's monetary policy extensively recently. And this is largely due to the fact that do not believe South Africa's interest rates should be as high as it currently is. We do not trust the inflation forecasts made by the South African Reserve Bank Monetary Policy committee (SARB MPC) and their quarterly projections model (QPM). Their inflation expectations survey is also skewed to the upside as they survey labour unions which will ALWAYS expect higher inflation as the higher the inflation expectations the higher the percentage of wage increases they can bargain for their members. We showed recently South Africa's interest rates should be at least 225 basis points lower than the current rate of 6.75%. According to Taylor's rule and our estimates of it South Africa's repurchase rate (REPO) should be at 4.5% and not 6.75%.
The current MPC is so fixated on inflation targeting that they seem to have forgotten the part of their mandate which states price/currency stability in the interest of sustainable growth. Well the economy is not growing, so while inflation is well within the 3% to 6% target of the Reserve Bank it is time to relax the inflation targeting and focus on the sustainable growth part of their mandate. High and increasing interest rates (our last interest rate move was in increase in November 2018) or contractionary monetary policy will not assist economic growth. Why keep interest rates high when the economy is struggling and inflation is well within the target band? It seems like the bank is taking a hardline against decreasing interest rates for fear of being seen as no longer independent or being influenced by politicians and pressure groups. Some might see it like this if interest rates were to come down, but the bulk of South Africans will see it as SARB taking steps to assist in reviving South Africa's economy. Time the inflation hawks are removed from the MPC and they be replaced by those with more moderate views on inflation and stronger views on balanced and sustainable growth in South Africa.
9. Stimulate local manufacturing industry
It has become the norm these days for firms (both local and foreign firms operating in South Africa) to import goods from countries such as China instead of using local manufacturers to supply goods. While this has the benefit of providing a greater variety of products and often cheaper prices for end consumers, the big drawback is that it is slowly killing the local manufacturing industry (which in 1994 contributed about 20% to South Africa's economy), with manufacturing now contributing less than 14% to South Africa's economy. It is an industry in continued decline in South Africa and it carries with it massive job losses. As we showed in last week, the clothing and textiles manufacturing in South Africa loses roughly 577 employees a quarter (over the last decade).
Steps required to fix South Africa's economy?
1. Put in place incentives for companies to employ and implement more relaxed labour laws
Government should incentivise companies who create employment or employ more people, be it via tax breaks or subsiding firms employing more people. Sure it might cost government a bit of money but the returns could easily outweigh it. How is that you ask. If more people are employed they will start spending money on goods government collect taxes such as VAT on. In addition to this if these new employees earn enough they will pay personal income tax. And all of these taxes collected could easily surpass the cost of incentives.
2. Put business friendly policies in place
Enough with the expropriation without compensation nonsens. We know it was used as political party campaigning tool to win votes. But no person or company will continue to invest in a country where their assets are taken without being duly compensated for it. In fact in cases where this type of policy has been implemented these economies collapsed. Zimbabwe is one such example. What happens is as soon as policies such as these are implemented there is a flight of capital , assets and people and this drags the country's economy down with it.
So make sure private property rights are protected by law and the constitution and win investor confidence and trust back, and the investments will return. And with it so will growth. As new assets such as land, buildings, machinery etc are bought demand increases which stimulates growth and creates jobs, which in turn leads to increased demand and even more jobs, and so the growth cycle is kick started.
Government should incentivise companies who create employment or employ more people, be it via tax breaks or subsiding firms employing more people. Sure it might cost government a bit of money but the returns could easily outweigh it. How is that you ask. If more people are employed they will start spending money on goods government collect taxes such as VAT on. In addition to this if these new employees earn enough they will pay personal income tax. And all of these taxes collected could easily surpass the cost of incentives.
2. Put business friendly policies in place
Enough with the expropriation without compensation nonsens. We know it was used as political party campaigning tool to win votes. But no person or company will continue to invest in a country where their assets are taken without being duly compensated for it. In fact in cases where this type of policy has been implemented these economies collapsed. Zimbabwe is one such example. What happens is as soon as policies such as these are implemented there is a flight of capital , assets and people and this drags the country's economy down with it.
So make sure private property rights are protected by law and the constitution and win investor confidence and trust back, and the investments will return. And with it so will growth. As new assets such as land, buildings, machinery etc are bought demand increases which stimulates growth and creates jobs, which in turn leads to increased demand and even more jobs, and so the growth cycle is kick started.
3. Reduce government red tape/bureaucracy
Make it easier for residents and companies to deal with government. Be it providing services to the state or receiving payment for services delivered. If its seen as to much of an effort to apply for certain rebates, incentives and the likes due to state red tape, a lot of residents or firms might decide not to participate due to the fear of the government bureaucracy taking to much time and effort and the benefit being outweighed by the negatives.
4. Fix the state owned companies or get rid of them
The continued bail out of state owned companies is a drag on the fiscus. Fix them properly once and for all and if that fails get rid of them by either privatizing them and or letting them close down. It is that simple. Government cannot continue to bail out corrupt, poorly and inefficiently run state owned companies. Government should concern themselves with governing the country, and not running companies. Leave that for the private sector.
5. Cut taxes instead of consistently increasing it
This is a very unpopular suggestion for government officials at the National Treasury and politicians in the ruling party in general. As cutting tax rates will imply less revenue collected for the state to spend on various projects (and dare we say less money that can be funneled away with corrupt activities). But lower taxes (especially personal income tax) will lead to greater spending by consumers which will stimulate demand and boost economic growth, and greater spending will lead to greater amount of VAT collected largely nullifying the effects of cuts in personal income taxes and the added benefit of increased demand which boosts growth which could lead to more people being employed in the economy to meet the greater demand which in turn leads to more people earning salaries, more money being spent on goods (so even more VAT collected) more taxes being paid and so the overall net effect of tax cuts could be a wider tax net (more people paying tax) and economic growth.
6. Corruption
Send people to jail for corrupt and fraudulent activities. Once government starts sending high profile people to jail for corruption and fraud the amount and rate at which corrupt activities take place will decline substantially. And this will ensure money earmarked for various projects are actually spent on what it was earmarked for and not funneled into bank accounts of corrupt individuals. This will lead to amongst other things better infrastructure and more efficient economy.
7. Fiscal policy needs to be addressed
This was touched on in point number 5 above in which we suggested government should reduce taxes, as even though government spending might be increasing fiscal policy could still be contractionary due to government continuously raising taxes which hurts the economy (potentially more than the economy gains from greater government spending).
8. Expansionary monetary policy
Cut interest rates as it is far to high considering South Africa's economic growth environment and relatively subdued inflation rate which is well within the 3% and 6% target of the South African Reserve Bank, and has been within the target range for a very long time. And expansionary monetary policy is most effective in conjunction with expansionary fiscal policy (as we show on our Monetary Fiscal Policy Mix page). Lower interest rates will reduce consumers debt burden and free of cash for spending which will boost demand and assist in growing the economy. And since current inflation rates are not driven by consumer demand there is scope to boost consumer demand in the South African economy.
9. Assist local manufacturing industry
Government needs to look at ways in which it can assist the local manufacturing industry. Continued imports from China, Vietnam, India and the likes are hurting the local manufacturing industry as it takes away business from locals and gives it to foreign firms. Problem is government cant put import tariffs on goods being imported into South Africa to protect local industries as this could lead to retaliatory tariffs in products we export to these countries. The best thing to do is to incentivise firms and locals to buy from local producers with tax breaks or other incentives. So boost local demand for locally manufactured goods. This is what the Department of Economic Development and Depart of Trade and Industry should have done years ago. Not much came from these two departments over the years.
If all of the above mentioned steps could be implemented and the problems mentioned at the start of the article could be addressed the South African economy will grow, and it will grow at rates a lot faster than what it has been in recent years. And this is exactly what is required in South Africa to reduce the massive unemployment rate, reduce poverty and ensure a prosperous South Africa for all who live in it. But to implement these steps will take a lot of political will and leadership and we are not sure there is enough of it going around in South Africa.
Make it easier for residents and companies to deal with government. Be it providing services to the state or receiving payment for services delivered. If its seen as to much of an effort to apply for certain rebates, incentives and the likes due to state red tape, a lot of residents or firms might decide not to participate due to the fear of the government bureaucracy taking to much time and effort and the benefit being outweighed by the negatives.
4. Fix the state owned companies or get rid of them
The continued bail out of state owned companies is a drag on the fiscus. Fix them properly once and for all and if that fails get rid of them by either privatizing them and or letting them close down. It is that simple. Government cannot continue to bail out corrupt, poorly and inefficiently run state owned companies. Government should concern themselves with governing the country, and not running companies. Leave that for the private sector.
5. Cut taxes instead of consistently increasing it
This is a very unpopular suggestion for government officials at the National Treasury and politicians in the ruling party in general. As cutting tax rates will imply less revenue collected for the state to spend on various projects (and dare we say less money that can be funneled away with corrupt activities). But lower taxes (especially personal income tax) will lead to greater spending by consumers which will stimulate demand and boost economic growth, and greater spending will lead to greater amount of VAT collected largely nullifying the effects of cuts in personal income taxes and the added benefit of increased demand which boosts growth which could lead to more people being employed in the economy to meet the greater demand which in turn leads to more people earning salaries, more money being spent on goods (so even more VAT collected) more taxes being paid and so the overall net effect of tax cuts could be a wider tax net (more people paying tax) and economic growth.
6. Corruption
Send people to jail for corrupt and fraudulent activities. Once government starts sending high profile people to jail for corruption and fraud the amount and rate at which corrupt activities take place will decline substantially. And this will ensure money earmarked for various projects are actually spent on what it was earmarked for and not funneled into bank accounts of corrupt individuals. This will lead to amongst other things better infrastructure and more efficient economy.
7. Fiscal policy needs to be addressed
This was touched on in point number 5 above in which we suggested government should reduce taxes, as even though government spending might be increasing fiscal policy could still be contractionary due to government continuously raising taxes which hurts the economy (potentially more than the economy gains from greater government spending).
8. Expansionary monetary policy
Cut interest rates as it is far to high considering South Africa's economic growth environment and relatively subdued inflation rate which is well within the 3% and 6% target of the South African Reserve Bank, and has been within the target range for a very long time. And expansionary monetary policy is most effective in conjunction with expansionary fiscal policy (as we show on our Monetary Fiscal Policy Mix page). Lower interest rates will reduce consumers debt burden and free of cash for spending which will boost demand and assist in growing the economy. And since current inflation rates are not driven by consumer demand there is scope to boost consumer demand in the South African economy.
9. Assist local manufacturing industry
Government needs to look at ways in which it can assist the local manufacturing industry. Continued imports from China, Vietnam, India and the likes are hurting the local manufacturing industry as it takes away business from locals and gives it to foreign firms. Problem is government cant put import tariffs on goods being imported into South Africa to protect local industries as this could lead to retaliatory tariffs in products we export to these countries. The best thing to do is to incentivise firms and locals to buy from local producers with tax breaks or other incentives. So boost local demand for locally manufactured goods. This is what the Department of Economic Development and Depart of Trade and Industry should have done years ago. Not much came from these two departments over the years.
If all of the above mentioned steps could be implemented and the problems mentioned at the start of the article could be addressed the South African economy will grow, and it will grow at rates a lot faster than what it has been in recent years. And this is exactly what is required in South Africa to reduce the massive unemployment rate, reduce poverty and ensure a prosperous South Africa for all who live in it. But to implement these steps will take a lot of political will and leadership and we are not sure there is enough of it going around in South Africa.