Finance forum
Hope for South Africa’s economy
South Africa’s economy may be nearing the end of its slump, and could start showing stronger growth by
2021/22, says a leading economist.
A
fter years of slow growth, South
Africa may be over the worst,
and could start seeing growth
by 2021/22. This is according to leading
economist Mike Schüssler, who was
addressing a VIP breakfast briefing in
Johannesburg recently, ahead of Africa
Automation Fair and the Connected
Industries Conference.
Schüssler said the first quarter in South
Africa is likely be a disaster, with corruption
and State Owned Enterprises (SOEs)
taking some time longer to sort out. Eskom’s
challenges would remain a growth inhibitor
too, he said.
In industries such as mining, Schüssler
expected a continuing drop in
employment figures for the next two
years – partly due to automation, but
mainly due to the fact that commodities
markets had changed and Eskom was not
performing well at all.
He did not expect South Africa’s gold and
platinum sectors to return to being the GDP
contributor they were in the 1970s and 1980s.
However, he was cautiously optimistic
about South Africa’s growth prospects: “I
think we can expect to start seeing growth
after a few quarters. We’re probably over
www.africanmining.co.za
the worst, and by 2021/22 we could be back
at 3% GDP growth,” he said.
To help spur this growth, the country
needed to be tougher on crime and labour
protests, and ease tax and legislation that
hampered small business growth. “A profit
motive is what enables businesses to grow –
if a business doesn’t make a profit it simply
can’t create jobs. So, the government needs
to reduce the risks of business investment
and reduce the red tape in the way of small
business growth,” he said.
For industry, the hope of a return to growth
means this is the time to start thinking
ahead to Fourth Industrial Automation
technologies and the broader ecosystem,
he said.
According to Schüssler the Fourth Industrial
Revolution era extended far beyond
technologies, and signalled a shift from
commodities-based economies and manual
labour, to services-driven economies.
“The Fourth Industrial Revolution is also
mainly a services revolution,” he said. “It’s
not just about industry, but also how you
sell things, transport things and more – it’s a
services thing.”
Changes wrought by this revolution
included a significant increase in the
number of people working in services and
a drop in the number of people working in
manual labour intensive industries. “In the
past 27 years alone, the number of people
employed in agriculture has dropped
from 44% to 28% globally, yet agricultural
output has increased. Meanwhile, the
number of service workers has increased
from 31% to 49%.”
“The Fourth Industrial Revolution is
personalised, serviced-driven and even
recycled, so the economic focus is no longer
only on commodities,” he said.
The Fourth Industrial Revolution and
associated services revolution presented
significant scope for innovation and new
business growth, delegates heard. Marius
Smit, General Manager: Technology &
Business Events at Africa Automation Fair
organiser Reed Exhibitions, noted that
there were clear signs of new opportunities
for manufacturers and a range of other
sectors in the Fourth Industrial Revolution.
Africa Automation Fair 2019 showcased
Industry 4.0 innovations to drive efficiency,
productivity and cost benefits, he said, with
leading sponsors such as Honeywell and
Rockwell Automation highlighting their
solutions to fast-track industry into the
Industry 4.0 era. b
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