The job crisis in South Africa may have more to do with politics than economics.
This is according to News24 journalist Carol Patton, who writes in her latest article that despite years of economic planning, job creation in the country has remained stagnant.
She cites political instability and inconsistent policies as hindrances to investment.
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“If you look at what is causing the economic problems, and what is causing the lack of investment, you will find that these are actually political things.”
Patten listed weak consumer confidence and business confidence, saying that 'without spending, you don't get growth.'
Many economic problems, says Patton, actually originate from political problems.
“What I'm advocating is that let's deal with these political blockages because these are real barriers to investment in our economy.”
She says falling business confidence since 2015 has played a direct role in slowing employment.
“Over time, the ANC government moved further away from a vertical economic policy that prioritized investment and placed a lot of secondary demands.”
Those demands included BBB-EE and localization, and Patton highlighted the difficulty in attracting investment as well as achieving transformation goals.
Essentially, the need for investors to 'get ahead of the curve' became irrelevant.
“Those things just drive up costs, and they dilute the returns.”
Another factor to consider is high political uncertainty, Patton points out.
“The growing uncertainty in the period leading up to last year, when we were removed from the gray list, the growing uncertainty among lenders in the capital markets about whether South Africa could actually repay its debt, increased the cost of borrowing for the government.”
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To listen to the conversation with Patton capetalkAmy McIver, please use the audio player below: