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Poor economic growth. Endemic unemployment. Riots. Deficient political leadership. An imminent debt standstill. These are but a few of current elements that correspond with the economic and political circumstances of the 1980s. And should Pres. Zuma not announce drastic economic policy changes today, historians may someday refer to the 2016 State of the Nation Address as a second Rubicon.

According to Cornelius Jansen van Rensburg, CEO of AfriBusiness, politicians know the impact that a disastrous and stubborn political policy may have on a country’s economic and political systems. Given the harsh lessons of the 1980s and a looming debt crisis on the horizon, politicians should do everything in their power to win back the trust of foreign investors.

According to Jansen van Rensburg, the four most important policy changes on which the President should focus, include the following:

1.    Abandon the plans to undermine property rights, thereby restoring investor sentiment.
2.    Professionalise the civil service, thereby restoring the trust of citizens.
3.    Abandon exclusive labour legislation, thereby providing employment opportunities to poor people.
4.    Implement a strategy to decrease Government’s welfare role to make people less dependent on Government.

These are difficult decisions which will harm the ANC in the short term. “These are, however, the correct remedies to release the grip of low economic growth and impending political instability,” Jansen van Rensburg said.

With his Rubicon Speech, former President P.W. Botha missed an historic reform opportunity at the time.  Afterwards, markets enforced reform – at a significantly higher cost to the country as well as P.W. Botha. South Africa still bears the consequences, and politicians cannot repeat this error.

Issued by AfriBusiness