South Africa has social tensions that require decisive economic leadership or else they could escalate beyond universities, Stavros Nicolau from the Gauteng Growth and Development Agency has warned.
Nicolau’s comments follow earlier warnings from political economist and brother to the former president, Moeletsi Mbeki who warned of a ticking time bomb.
(READ MORE: South Africa is a bomb waiting to explode: Mbeki)
“There are a couple of basic things we need to do in the country and when we do those things correctly there is no need why we cannot re-instil confidence back into the manufacturing sector,” he said.
Nicolau warns that poor economic performance is a recipe from social tensions.
“We need to develop industrial activists since we seem to have all sorts of activists in the country as this is the only way we can get growth from five per cent and beyond. If we don’t get to five per cent and beyond the social tensions playing out at the moment at universities will manifest more widely which is a dangerous sight for us,” he warned.
He also urged the country to prioritise industrialisation.
“We need to develop a culture of placing industrialisation at the forefront and operationalise some of the projects we have in the pipeline,” he said.
“Most post-liberation countries that have succeeded have done that and I think South Africa should do the same.”
Nicolau welcomed the new investment bill but urged the government to pronounce it more effectively especially to trading partners.
“The bill is an improvement from the previous one, it also mirrors bilateral agreements we have made with our partners and jurisdictions. It’s a document that is balanced but what has been done poorly is some of the key tenets of it.”
Nicolau added that some of South Africa’s traditional trading partners felt that they are [not] as important as they used to be. He also defended the country saying it had made some improvements in being more investor friendly.
“Our menu of investment has improved over time but we need to be more customised towards specific companies and sectors. We need to have flexibility around those incentive schemes; the one size fits all as an incentive needs to be modified.”