“Just the fact that we can have free and fair elections that everyone can voice their opinion, it’s very important. There’s stability, there’s a foundation and one can build from there. There’s a platform that’s been laid,” Chris Botes, executive director at Business Partners, told CNBC Africa.
South Africans went to the polls on Wednesday for the country’s fifth democratic elections, at a time where the country’s economy has been stalled due to long-standing labour sector unrest.
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The country’s current political climate has also always been essential to the country’s business environment, but and according to Trudy Makhaya, an independent economist, a party’s proposed policies cannot always be adopted.
“The different parties have positioned themselves across the spectrum from left to right. Some have differentiated themselves far more than others [such as] the Economic Freedom Front. They have gone with the nationalisation route, state led industrialisation,” Makhaya explained.
“A lot of the things they’re propagating are national policy issues. Even if they gain dominance in certain provinces, or they’re the official opposition in certain provinces, it will never come to pass. If it had to come to pass, there are so many checks and balances in the parliamentary process that some of those ideas will probably never see the light of day.”
Mteto Nyati, managing director at Microsoft South Africa, added that the political parties have nonetheless pin-pointed some of South Africa’s long-standing issues.
“Most of the parties are targeting the right issues: the question of unemployment, youth unemployment in particular, is something that is almost common throughout. That’s very important. The question of trying to support small businesses is linked to the jobs question as well,” said Nyati.
With South Africa’s unemployment rate having accelerated to 25.2 per cent in the first quarter of the year, Botes explained that both government and private sector will have to do more that provide jobs.
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“Everybody is making the noise about job creation, about small businesses, but government intervention and being a responsible for the job creation, it can never work. I would rather support those that say ‘let’s get the legislative environment right, let’s get the policies centred around SME development and job creation’”, said Botes.
“There, you can get the right financial support programmes, [and the] right non-financial support programmes, even incentives for job creation. Those type of things can work.”
On the investor front, sustained political stability as well as the legitimate and constitutional change of government will play a large role in gauging South Africa’s country risk rating and future outlook.
“It’s actually quite important, what we’re seeing in South Africa today. In fact, what has been happening over the last five elections is quite critical. The things [people oversees are] looking at is are you going to have free elections? Are they going to be fair? No violence? And What does it mean for the environment of business,” said Nyati.