The Key Challenges facing South Africa

The Key Challenges facing South Africa

With a population nearing 58 million people, South Africa has one of the continent’s largest and most developed economies.  However, there is little doubt that the country faces a myriad of challenges constraining this economy and negatively impacting on the general well-being of its citizens. Foremost amongst these are excessive crime, high unemployment rates, and the lack of a quality education system amongst a broader range of issues. The author aims to discuss the impact of the selected key issues on the economy and how the business could play a role in addressing them.

South Africa has a notably high rate of violent crimes, compared to most countries. It is an issue that is commonly faced by all citizens and has a negative impact on their quality of life, regardless of what their economic status is, as they continuously live in fear of being exposed to violent crime. Prisons are overcrowded, the justice system becomes overburdened, and law enforcement costs increase significantly. Although South Africa has a fully functional justice system, the perception of crime tends to keep investors and tourists out of the country. The socio-economic effects of this are felt all across the nation as development and tourism growth takes place at a much slower rate than it ideally should. The prevalence of a high crime rate has led to huge amounts of money having to be wasted on the prevention of criminal activity in addition to investments in the country, and tourism growth is negatively affected.

The problem of unemployment is another reckoning issue for South Africans. South Africa has some of the worst unemployment levels among major emerging market economies. According to Stats SA, around 29% of South Africans are unemployed. The country has experienced high job losses, mainly in the manufacturing and construction sectors. Unemployment is a major contributor to widespread poverty and income inequality which leads to social problems and an increase in crime. Labour is exploited to work in unfavourable conditions with low pay. Political instability increases as the unemployed engage themselves in destructive activities and general productivity also decreases as the constructive use of the labour force is hindered. The issue of unemployment has a significant negative impact on economic growth and development.

One of the most important areas of concern in South Africa is the quality of education and the issues relating to this area are complex and multifaceted. The advent of democracy triggered reorientation of the education system to refocus the racially segregated public spending on education to targeting poor children. Indeed, South Africa did realise a rapid expansion of education, including increased enrolment in basic and tertiary education, but the quality of education has remained poor and largely characterised by inequality. Students from poor community’s experience problems with high fees, lack of books, deteriorated facilities, lack of teachers, and lack of high-quality instructions. This led to students often leaving school without the necessary skills to transition into university thereby leading to universities not producing sufficient graduates. A proper education has the potential to increase the employability or income generating capacity of South Africa’s majority poor thereby enabling them to be employed or be entrepreneurs in their own right mitigating on the high inequality levels in South Africa. A country faced with a poor quality of education perpetuates inequality in the return of skills, unemployment and low productivity which leads to low income generation.

While government continues to try to find solutions to the shortage and gaps, there is an opportunity for businesses to further step into the circle and lend their support. As South Africa’s structural unemployment problem is closely linked to inadequate education provision, fixing the latter should benefit the former by making the future labour force more employable. In this regard, a recent PwC survey highlighted that 90% of South African CEOs view the availability of key skills as a major business concern. Here, businesses will also have to play a more active role in education enhancement in future, as government has run into overall budget spending constraints. Businesses should find a way to encourage a dynamic and innovative domain where students can be rewarded sufficiently for experimentation and risk-taking. Apart from the tertiary bursary programmes and learnerships that corporates typically favour as their contribution to education, a more direct involvement by businesses in primary and secondary education within the societies that they operate, should also become paramount. Adopting schools, sponsoring teachers, providing study materials to schools and delivering talks and discussions relevant to today’s modern world such as Information and Communications Technology (ICT) capabilities will have to become more frequent practice through businesses if meaningful strides are to be made.

Despite these concerns about key challenges in the country, South Africans have a lot to celebrate. Apartheid was successfully ended and a democratic government was launched. If keen interest is paid by all role players to pursue economic conditions that will spread wealth throughout the population, the country can overcome the obstacles that stand in its way of economic growth and development. The key issues, if not addressed, pose an overall negative effect on the South African economy.  Generally, by being aggressive and evaluating national priorities collectively between government and businesses, South Africa can develop a positive change that will be progressive for its people and its economy.