To grow South Africa's economy business turnover must grow
Category: Economics and business
Date: 8 June 2023
Date: 8 June 2023
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While it seems prety obvious for the economy to grow business turnover must grow, we believe the South African government tends to forget this.
Reason we saying government tends to forget this is the fact that they do very little in terms of policies and services that that put in place to allow for businesses to grow in South Africa. Most of the time they tend to do things that slows or restricts growth instead of letting it flourish. Yet they then bemoan the slow economic growth and keep looking to the business sector to assist in growing the economy |
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The truth about economic growth the SA government seems to ignore
Most modern day economists and economic theories agree that the role of governments in the economy should be kept to the bare minimum. Set and implement effective pro business policies and the economy will grow. Other than that the less interference by governments to try and run the show the better. Let the private sector do what they do best, which is allocate capital and resources effective and efficiently to ensure sustainable and fast economic growth.
The more government tries to intervene the more red tape, the slower the allocation of resources and capital, and in all likelihood the less foreign ivnestments will be attracted, all bad signs for economic growth.
The image below shows a monthly timeseries of economic growth and the monthly turnover of all industries in South Africa. One can see that the two are highly correlated. Greater business turnover leads to economic growth, or is it the other way around? For the purose of this article lets assume and its a strong assumption to make, that greater business turnover leads to higher economic growth
The more government tries to intervene the more red tape, the slower the allocation of resources and capital, and in all likelihood the less foreign ivnestments will be attracted, all bad signs for economic growth.
The image below shows a monthly timeseries of economic growth and the monthly turnover of all industries in South Africa. One can see that the two are highly correlated. Greater business turnover leads to economic growth, or is it the other way around? For the purose of this article lets assume and its a strong assumption to make, that greater business turnover leads to higher economic growth
So some advise to the South African government
Take your socialist and communist policies and stick it where the sun doesnt shine. That wont lead to any meaningful economic growth that this country desperately requires. Sort out the main economic sticking points right now. Incase you dont know what they are here is a short summary of the main economic issues in South Africa:
If these points above can be addresedd rapidly by the South African government things would look a lot better for the South African economy and for South Africa as a whole. Get it done!
- Reliable electricity supply
- Corruption
- Ailing infrastructure (electricity, road, rail, water you name it)
- Poor rail infrastructure
- Crime
- Youth unemployment
- High individual and corporate tax rates
If these points above can be addresedd rapidly by the South African government things would look a lot better for the South African economy and for South Africa as a whole. Get it done!