Drastic measures now or economy suffers- Experts warn
Economists have warned that unless drastic measures are taken now to help turn around the economy, growth prospects for the next three years will remain dull.
In their latest report, Simonis Storm Securities expressed that such measures include improving strategic service infrastructure, rapid SOE reforms, improving capital allocations and attracting talent and skills.
Part of the suggestions involve the removal of policy uncertainties to try and win back foreign investors and investor confidence, rent-seeking behaviour shackled and a booming commodity price environment.
“With the above, we need strong leadership that can tackle corruption and takes the economy out of the current prolonged recession,” said the firm.
They indicated that during the South Africa State of the Nation Address (SONA), president Ramaphosa highlighted the need to continuously boost investment amongst other commitments.
Meanwhile, Namibia’s SONA will be held in March and Simonis Storm expects the President to re-enforce accountability which is necessary to close the leakages in state finances.
“In addition, we expect the President to make known the election date, to provide an investment policy certainty statement and the strategy on inefficient and non-revenue generating SOE’s,” they said.
The Namibian budget speech will be held on the 13th of March 2019 and expectations are that revenue will undershoot by 4.2%, 8.2% and 12.6% to N$54.3 billion, N$52.9 billion and N$53.6 billion in 2018/19, 2019/20 and 2020/21, respectively.
The economists said their projections are underpinned by expected sluggish VAT collection as spending subsidise, lower SACU revenue and declining income taxes on individuals and companies.
Simonis Storm also said that Fitch and Moody’s are expected to review the sovereign rating of SA and Namibia in April 2019.
The tone and projections from the budget speeches on the 20th of February and the 13th of March, respectively, will play a big role in the agency’s decision making, said the firm.