The South African economy has a number of competitive attractions in the global context, economist Chris Hart said yesterday.
“The country is solvent, there is yield and there is growth,” Hart said in Johannesburg.
“We see this reflected in our financial markets, where investors are supporting our bonds and supporting our stock markets. That suggests that South Africa has an attraction as an investment destination.”
However, the country’s internal problems were hampering long-term investment, he said.
Hart, chief economist at Investment Solutions, was speaking at a Johannesburg Chamber of Commerce and Industry breakfast.
He said policy uncertainty played a role in hampering the growth and movement of long-term investment, and the country needed policy certainty.
Long-term investment was essential in industries such as mining, agriculture and manufacturing.
“It’s not a case to say we’ve got policy certainty — you’ve got a choice between dreadful and awful — which is what happened in the mining industry,” he said.
“It needs to be supportive policy choices to attract investment.”
Hart said it was extremely difficult for small businesses to be formed and to operate in the South African economy, and this contributed to the high unemployment rate.
The economy faced a major problem with its levels of unemployment.
“The reason for unemployment is internal more than external,” he told the meeting.
“Unemployment [in South Africa] is exceptional.”
He compared South Africa’s unemployment rate to that of Brazil. In 2002, joblessness in both countries started decreasing. Then came the 2008 global financial crisis.
The period between 2002 and 2008 generated many jobs. Brazil’s unemployment rate decreased after