CAPE TOWN – While the economy bounced back in December, showing better than expected growth in the gross domestic product figures for the third quarter, this came off a very low base.
Economist Iraj Abedian said even if the economic recovery plan was properly implemented, it would be a long time before things are back on track.
Abedian, who is the founder and chief executive of Pan-African Investment and Research Services and executive chairperson of Pan-African Capital Holdings, said that the time for talking was over and that urgent action was needed.
When asked what the chances were for sustainable economic growth in 2021, Abedian had this to say:
â€œThe reality is that, as the National Treasuryâ€™s projections show, it will take â€“ if everything goes according to plan and it seldom does â€“ but assuming that it does, in three yearâ€™s time we will be where we were last December (2019), when we were in a technical recession.â€
Abedian said economic growth wasnâ€™t an accident: it depended on what was done and how quickly. What was left undone was also a factor.
Thereâ€™s a lot of talk about structural reforms in the energy sector, with the wireless spectrum, and of a more efficient public sector. But Abedian said action – and not talk – was needed.
â€œTalk is not going to create growth or sustain growth. If we move from talking to acting and doing it with haste, then yes. The economy has sunk, (but) thereâ€™s lots of new opportunities, lots of growth potentialâ€¦ in almost all sectors.â€
Abedian said the reason there wasnâ€™t more movement in spite of plans being in place was because of the divisions within the ANC, the party of government.
â€œThose who need to move the process, they canâ€™t agree. The faction-fight within the ANC in effect prevents them from coming onto the same page in terms of what needs to be done, how quickly it should be done and in what sequence it should be done.â€
Abedian said instead of focusing on their portfolios, ministers were distracted by who was getting the upper hand as factional battles played out.
â€œThe second factor that also contributes to it is the lack of technical capacity within the state, which President Cyril Ramaphosa keeps talking about.
â€œEven when the government decides on something to be done, the technical capacity to do it effectively and on budget, on time, is simply not there.â€