South Africa needs to be an extremely favourable investment destination if it wants to rescue the ailing economy and prevent it from reaching junk status, according to Chris Hart.
A downgrade is likely on the cards for South Africa, said Hart, who was embroiled in a Twitter row and subsequently resigned from Standard Bank following harsh criticism.
“I think the downgrade is baked in the cake. There is nothing I can see that is on the table that is going to prevent that from happening and that is a shame.”
He said escalating taxes and tightening regulations are making it more costly to do business in the country.
“We need to find ways on how to make South Africa a more attractive destination for investors. Without economic growth, we are going to go backwards.”
The economy has been under strain leading to a growth slowdown that has contributed to rising government debt, resulting in credit rating agencies slashing the country’s debt to one notch above junk status.
The treasury, South African Reserve Bank, International Monetary Fund and World Bank all forecast growth of less that 1% for this year.
Hart said the offending tweet was meant to observe that the country is facing a pressure-cooker situation.
“We are not creating jobs and that is creating pressure such as xenophobic violence and an increased reliance on the state.”
He said South Africa is capital deficient and needs policies that help to build capital.
“We need to move to substantial economic growth, which means we need to be an extremely favourable investment destination.”
Commenting on South Africa’s future and the impact of racism, Hart said racism, like xenophobia, tribalism and homophobia, is an important issue that we need to stand against.
“I think it is all part of the same kind of hatred which is something that we need to be fighting against.”
With the elections looming, Hart warned against using racism as a tactic to direct attention away from service delivery, corruption and the state of the economy.
“My big concern at the moment is that we have a government that has under-delivered … and they are using racism as a deflection from actually focusing on what I call bread and butter issues,” he said.
“Of course we have to deal with racism and we’ve got to be very vigilant against the prevalence of racism — and that I believe is across race groups — but we have to be mindful that we can’t eat racism, racism doesn’t create jobs.”
