Page 15 - IRMSA Risk Report 2021

“We need to consider what the world thinks of us, and to recognise we
have some real challenges. It would be sad if we lost our status as the
entry point to Africa and need to lead by example. The response requires
long-term thinking and solutions. We have a great country,” emphasises
Jacques Celliers.

Nonkululeko Nyembezi, a seasoned non-executive director and CEO
further highlights that “as human beings, we can, and indeed very often,
do become our best selves in a crisis. For South Africa, we have not seen
such low levels of dissonance in the social discourse as we saw in April
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WATCH and May of 2020. Everybody was pulling in the same direction. We had the
Solidarity Fund established in a matter of days and we had business and
government working together collaboratively for the first time in a very
long time”.
NONKULULEKO NYEMBEZI
CHAIRMAN - JOHANNESBURG STOCK
EXCHANGE

1.4 REVISITING THE REGULATORY POLICY FRAMEWORK

Speaking to Mcebisi Jonas, previous Deputy Minister of Finance and Member
of Parliament, “for developed markets like South Africa, it’s been difficult. These
are commodity-based economies. Commodity prices are critical and China’s
and broader global market demand for commodities has dropped, which has
negatively impacted economies like South Africa, Nigeria and Ghana, as well as
other African countries, and even some Asian and Latin American countries”.

The collapse of government revenues in developing economies is creating
huge challenges on policy, with the rise of populist economic policy, likely
resulting in increased taxation, and greater restriction of the movement of
money between jurisdictions. This will impact on the extent of global trade
and the speed of development in developing economies.
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WATCH
We need a stronger filtering mechanism to ensure that the right calibre
of visionary leadership comes through the ranks. We need leaders that
understand the importance of partnership. We need an effective, efficient
state. The partnership with the private sector is critical to ensuring growth.
MCEBISI HUBERT JONAS
To foster growth, we need a particular regulatory environment that enables COMMENTATOR ON SOUTH AFRICA
business to grow, and the largest concern is what shape the future regulatory
environment will take. In a state of crisis, governments tend to veer towards
stronger, more rigid regulation. We need a regulatory model based on
objectives and tangible outcomes, rather than control.

Given the fiscal crisis and the lack of growth, the danger is that government adopts stronger capital controls and increased taxation,
which renders the environment less competitive and hinders growth.

We are a small economy by global standards. We are highly dependent on foreign direct investment to drive growth. The economy
is also focused on fiscal redistribution. Government requires cash to sustain this model, strongly dependent on growth. We can
question the sustainability of this model.

Jonas suggests that, “we need to revisit the macro model for the country and consider the trade-offs that need to be made, to
strengthen fiscal management and change fiscal allocation. As a country we also need to deal with education to be able to address
inequality and growth. Although there has been robust dialogue between government and business in the last four years, the
continued collaboration between public and private sector is key to our growth path as a country”.

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