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With severely limited fiscal space, planned economic reforms need to be fast-tracked. South Africa is in a grip of panic over the impact of the coronavirus disease 2019 (COVID-19). The situation prompted an extraordinary address to the nation by President Cyril Ramaphosa on the evening of March 15. Apart from very real human health concerns, he commented that the outlook for the local economy – already on a weak footing heading into 2020 – is a big headache. Economic growth forecasts have been cut over the past few weeks as forecasters realise that the impact of the pandemic will be larger than previously thought. This begs the question: how will local authorities respond?
According to the latest Employment Outlook Survey, South African employers report limited hiring intentions for the second quarter of 2020. While 8% of employers forecast an increase in payrolls, 5% anticipate a decrease and 85% expect to make no changes. Once the data is adjusted to allow for seasonal variation, the overall outlook for South Africa stands at +2%, unchanged from the previous quarter.
Markets are walking on eggshells as the outbreak of coronavirus disease (COVID-19), first reported from Wuhan, China in late December 2019, is wreaking economic havoc. Data from the world’s second largest economy shows a plunge in business activity in the last month, including massive declines in passenger traffic, electricity generation, shipping volumes and real estate transactions.
Budget statements have in recent years perennially made downward revisions in economic growth projections. Disappointing growth outcomes compared to official forecasts is partly attributed to the inability to implement planned structural reforms that would have delivered improved growth outcomes.
In 2018, 1.4 billion people crossed an international border to take a holiday, and this number is set to rise with an estimated 5 billion people travelling internationally by 2050. SA tourism must work to capitalise on the social megatrends that are influencing how and why people travel, and what they look for when they do.
Demonising oil and gas companies is not a constructive way forward on energy transition. Africa will push for 'the Right to Drill'. African nations must and will take advantage of their hydrocarbon resources for economic development. Environmental sustainability is a part of it, not an impediment.
We have unveiled the State of Entrepreneurship in South Africa after surveying more than 1,000 entrepreneurs across the country. 2019 marks our fifth year of engagement with local entrepreneurs, with the latest findings showing that entrepreneurs are optimistic and resourceful even as the sector is enduring one of the most difficult economic periods.
In a general South African sense, the word 'transformation' has taken on an important, but perhaps singular and distinctive meaning. To be of real economic value to the nation as a whole, transformation needs to be inclusive across a broad range of South African society.