CAPE TOWN - BLSA CEO, Bonang Mohale gives his remarks ahead of Davos Meeting of the World Economic Forum next week.
Mohale stated on Thursday that as leaders of business, there must be some recognition of the extent of the economic difficulties the country is confronted with, amid sluggish growth conditions and poor consumer and investor confidence.
Mohale goes on to emphasise that there is an urgent need to bolster efforts and work closer together to pull the economy back from the brink onto a sustainable and inclusive growth path.
"We have been disappointed in the recent past that much of the work we set out to do has been hampered by a number of factors, including avoidable political and policy uncertainty."
"We believe that all the negative credit ratings actions that the country has suffered so far could – and indeed should – have been avoided had the required structural reforms necessary to underpin sustained and inclusive economic growth been implemented, Mohale said.
It is also disappointing for Mohale that key sectors for economic growth and employment creation continue to operate amid uncertain industry policy, and there are still too many regulatory impediments that hinder investment.
"These concerns have been strongly conveyed in the continued engagements with the government. With the much-anticipated ANC leadership changes behind us, much work now needs to be done to, amongst other things, restore confidence in our country."
The BSLA believes that it is absolutely vital that government urgently refocuses to ensure that the reform of our key state-owned corporations (SOCs) is made a top priority, and that the February 2018 Budget contains strong measures on cost containment and structural reforms to boost growth and revenue collection to arrest the unsustainable increases in government debt and fiscal deficits.
Decisive action on these key issues is a matter of extreme urgency in order to regain our investment-grade ratings as a foundation for growing our economy and reducing unemployment especially amongst our youth.
Mohale said that "we must be reminded – and acknowledge – that it was our lack of progress, clear direction and decisive action on key issues that resulted in our deteriorated credit worthiness with two of the three rating agencies now rating our local currency debt as so-called ‘junk’."
"We should also be acutely aware that the decision by Moody’s, the rating agency, to place us under review is nothing but a reprieve and a last chance for us to demonstrate that we are serious about implementing the measures necessary to achieve sustainable inclusive economic growth and fiscal consolidation."
Mohale achknowleded that the upcoming World Economic Forum (WEF) meetings present a great platform for us to demonstrate tangible change and to renew international confidence in the South African economy.
"We shouldn’t squander this opportunity. We strongly believe that the focus will be on institutional strength, fiscal discipline, regulatory and policy certainty and clear plans to reignite growth."
-BUSINESS REPORT ONLINE