The University of the Free State (UFS) has held its second Thought-Leader Webinar which focused on the state of the economy. This while the country is still grappling with the effects of the Covid-19 pandemic as well as the long-term effects of a contracting economy.
According to Dr Trevor Manuel, Chairperson of Old Mutual Limited and former Minister of Finance, the hard lockdown earlier this year came after three successive quarters of economic contraction. “We find ourselves at the base of this ravine, having tumbled down. How do we extricate the South African economy from where we are given the geography of where we are?” he asked during the webinar last week.
“I think the 51% contraction in the second quarter must introduce a sense of urgency and focus the mind. We are not alone. But we need to be rigorously honest about where we are. And we need to also ask ourselves tough questions of whether we have the wherewithal to reconstruct the economy,” said Dr Manual.
Other panellists who shared their views on the economy making its way out of the Covid-19 crisis included Executive Director of the Centre for Development and Enterprise (CDE), Ann Bernstein, and City Press Editor-in-Chief, Mondli Makhanya.
According to Makhanya going forward tough decisions have to be made while a more focused approach to local economies would need to be developed by fixing municipalities. “Decisions need to be taken around the health of the fiscus, around the public wage bill, around issues of freeing up enterprise, and about reforms. The decisions will take a long time to make and some of them will be unpopular, but they need to be taken,” said Makhanya.
“A capable state will enable us to fix the municipalities; this is where the economy really needs to happen, where small business need to take place. Economic activity will happen at local level,” added Makhanya.
“South Africa has all the potential to be a great African economy, with all sorts of strengths that we could build on. But we keep disappointing,” Bernstein agreed.