Efficient Group chief economist Dawie Roodt has warned that things will get worse in South Africa because of poor macroeconomic policies.
Speaking to SABC about the country’s financial challenges, Roodt said there are many reasons South Africans suffer economically.
These include the war in Ukraine, the increase in the price of oil and food, the slowdown in the global economy, and rising inflation rates.
However, the main reason for South Africa’s economic hardship, he said, is the wrong macroeconomic policies by the government.
“The government has been implementing the wrong things and mismanaged the economy for many years,” he said.
He added that the South African economy is unlikely to grow faster than 2%, which means there will be an increase in unemployment and poverty.
The combination of rising unemployment and poverty and rising food and energy prices creates a toxic mix which can cause social unrest.
The answer to these problems, Roodt said, is strong political leadership to make the right business decisions. However, it is not happening.
“I am afraid our political leaders are absent. They are not there to lead the country because there is so much infighting in the ANC that they are not even aware of all the problems,” he said.
What South Africans can do in the short term
Roodt said South Africans should realise the country is facing challenges and advised them to identify their industry’s risks.
They should manage the risks and be prudent in budgeting and making plans to mitigate the impact of these risks.
As a country, Roodt said advising on a path forward is more challenging.
“We have a government that caused the mess we found ourselves in, and until we fix our political issues, there is not much we can do,” he said.
From an economic perspective, there are many easy wins, like increasing interest rates, but that is only one piece of the puzzle.
“There are many other things which must happen as well, but that requires strong political leadership, which we do not have,” he said.