Many lessons have already been learnt since election day
As South Africans hold their collective breath ahead of a new coalition government, many lessons have already been learnt since election day.
We have learnt the curious juggling act – as yet incomplete -- of forging a government out of parties with diametrically opposed views on a range of key issues, including how to manage a country’s finances. The national assembly is likely to be a place of robust politics, to say the least, regardless the shape of the upcoming coalition.
We have also learnt how challenging it will be to regulate the economy, and hopefully to grow it, in the current constrained environment. With all eyes last week trained on the IEC election results board, few would have noticed that economic growth contracted in the first quarter of 2024 despite hopes of better first quarter results. The -0,1% quarter-on-quarter contraction, small as it is, is nevertheless significant; it will surely focus attention on the massive task that awaits government’s coalition partners, whoever they turn out to be. While opinion will inevitably be divided over contentious issues like National Health Insurance and land expropriation, there can be no denying that economic growth is non-negotiable if the incoming government wishes to deliver on even a fraction of the inevitable promises we are sure to hear in the coming days.
Commentators talk of a ‘Gordian knot of unemployment, poverty and inequality’ facing the incoming administration. The fear is that policy uncertainty around important economic issues will significantly hamper government’s ability to untie this Gordian knot and set a new course of economic prosperity. Periods of sustained growth are almost always associated with stable politics, which some might say doesn’t auger well for our immediate future.
Others might say South Africa likes to make up its own rules of engagement, for better or for worse.
There is good news, too, among the things we have learnt since May 29. Western Cape tourism continues to track upwards, with the latest figures showing a 17% increase in visitors to key attractions in the province between January and April this year compared with last year. The province also attracted R139,6 billion in foreign direct investment over the past ten years, according to figures contained in trade and investment promotion agency Wesgro’s latest annual report. Annual foreign direct investment in the region has grown from around R4,6 billion in 2014 to over R13-billion over the past three years.
The province’s figures should be a flashcard of success and inspiration for anybody currently locked in coalition talks about our economic master plan.
South Africa does not suffer from a shortage of success stories; the challenge is to find a way of making everybody a part of them.
John Lawson
CEO of the Cape Chamber of Commerce & Industry