Small businesses, private sector can prop up economy – experts

Leading economists regard Eskom’s load shedding as the main retardant of South Africa’s economic growth this year, but the worst can be avoided if business comes to the party to save the economy from collapsing.

Top business leader and an expert on small business development, Hennie Ferreira, chief executive officer of Osidon, said these circumstances gave small businesses, in particular, an opportunity to thrive and the private sector a chance to play a bigger role in growing the economy.

Mike Schussler, chief economist at Economist.co.za, said load shedding would be the major impediment in economic performance.

“It all depends on Eskom – what Eskom does, or does not do, will be important for our economy this year,” he said.

“Economists normally don’t put power in economic models. Whatever happens, we are going to have a very big fall in the economy, I don’t know how big, but it all depends on load shedding.”

If there was no load shedding, South Africa would experience some growth, most probably less than 1%, maybe up to 1.9%, he added.

Ferreira was cautiously optimistic about the year ahead and acknowledged the efforts being made to pull the economy out of the quagmire.

“I wouldn’t say the outlook for this year is the most positive,” he said. “There has definitely been a turning point in South Africa, but it will take a while to implement.

“There are tough decisions to be made by our country’s leadership. There is definitely an awareness and drive to solve the problems facing the economy.

“A very positive outlook for this year is that there is a larger gap for the private sector to play a bigger role in the economy. The government doesn’t have a choice but to look at privatisation and offer smaller businesses opportunities to solve problems.

“I think 2020 will be the year in which the private sector can play a much bigger role in the SA economy.

“A huge opportunity this year will come out of SA taking over the rotational chair of the African Union (AU). Through the AU’s establishment of the continental free trade area, intra-African trade will be boosted, offering local businesses opportunities to expand to the rest of the continent.”

For more news your way, download The Citizen’s app for iOS and Android.