Former Standard Bank chief economist Chris Hart had said that South African economy would reach Junk status if it fails to increase its investment.
Hart who had resigned from Standard Bank (JSE: SBK) following his suspension over harsh racial criticism he tweeted, said there is a possibility that the South African cards will downgrade and the country is doing nothing at the moment to save its economy from doing so. He pointed out that the economy has been bantered thus leading to its steady downfall
“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.
Chris Hart further noted that escalating taxes and tightening regulations was making business more difficult to operate in the country, and this according to him has contributed to the government’s increasing debt, which also results in credit rating agencies slashing the country’s debt to one notch above junk status.
“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 backward,” he noted.
Speaking to Fin24, the economist said the fact that the country has failed to create jobs has exerted much pressure on the economy. He added that issues such as xenophobic violence and an increased reliance on the state are all pointers that the nation is facing a pressure-cooker situation.
South Africa is capital deficient and policies that will help rebuild it is highly needed.”We need to move to substantial economic growth, which means we need to be an extremely favorable investment destination.” Hart further said.
When asked about his opinion on how the issue of racism affects the country’s growth, Hart said racism like other serious issues such as xenophobia, tribalism, and homophobia, must be seriously tackled by the citizens.
He further warned that the issue of racism and racial discrimination should not be a distracting factor against major issues such as service delivery, corruption and the state of the economy in the forth coming elections.
Hart said he is much concerned about the Zuma-led administration which has under delivered and are using racism as a deflection from actually focusing on what he call bread and butter issues,
“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,” he said.