Business Pressure Key to Breaking SA's 2% Growth Ceiling, Says Parsons

Pressure from organised business can help South Africa break out of its narrow 1% to 2% growth corridor and weather the immediate impact of the global energy crisis, according to prominent economist Professor Raymond Parsons.

Business has a vital stake in good governance, as illustrated by National Treasury's recent intervention in the finances of 69 municipal authorities. Parsons noted that this intervention is "a reminder of the stake which local business also has in the performance and finances of local government."

"The pending local elections create an excellent opportunity for Chambers throughout the country to engage with the leadership of all political parties on factors essential to successful local economic development," Parsons said. "What inhibits or worries business should now be shared with existing and future political decision-makers at the local level. It also demonstrates the relevance of organised business to issues of the day at a practical level."

Despite the vulnerabilities associated with being a small open economy and a net oil importer, South Africa currently has a window of opportunity in the form of potential economic reform. However, swift implementation is required to take advantage of this.

"A significant part of SA’s economic buffers and resilience lies in its ability to accelerate the pace and implementation of growth-friendly reforms at different levels, to which both government and business are already committed," Parsons said. "We must now begin to look beyond the immediate impact of the global energy crisis and ensure that the economic recovery that was apparent earlier in the year will resume by the end of 2026, and continue into 2027. SA needs to break out of its narrow 1% to 2% growth corridor in the years ahead."