The economy grew by a mere 0.7% in the third quarter of this year after contracting by 1.3% in the previous quarter. As a result, overall growth estimates for 2015 have been revised from 2.3 % down to 1.2%. This would make it the lowest since the 2009 recession, and less than half of the twenty year average of 3.2%.
Make or break formula
How can the government improve the financial management of the country’s economy? According to the Sunday Times, the Goldman Sachs MD for sub-Saharan Africa, Colin Coleman says that the current combination of high unemployment, low growth and rising interest rates is a dangerous combination for the economy. He recommends creating a group of economic ministers who are centrally driven around the objective of growth and development. He also advocates the creation of an advisory economic council including captains of industry, trade unions, civil society leaders and economic ministers.
Similarly, Iraj Abedian, CEO of Pan African Advisory Services, recommends that Government, Labour and Business need to work together to resolve the issues. This would mean wearing different hats. Labour would need to focus on productivity, while business would need to be more socially active. Government’s role would be to balance and protect national interests.
Timing is everything
Coleman said that his proposals regarding a government led initiative to work with business and trade unions had been positively received by government officials but that it might be a difficult challenge two years ahead of the leadership succession.
This begs the questions. When would it be the appropriate time for government to address this urgent issue? When do national interests come before the self-serving interests of the leaders of the ruling party? In two years’ time, what state will the economy be in?
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