If SA was a business there would be tougher questions

Steven Nathan, CEO of 10X Investments.

If South Africa was a business or a household trying to balance its budget the team at the top would be asking some very pressing questions, says Steven Nathan, chief executive of 10X Investments.

Nathan, who is the founder of the disruptive asset manager with more than R9 billion in assets under management, points to Word Bank forecasts for global growth of 3.1% in 2018 and 4.5% for emerging markets, against expectations for growth of 1,1% in South Africa.

“We are barely profiting from the modest commodity boom currently underway. We need to grow at 2% pa at least, just to keep pace with population and employment growth.

“A business in a similar predicament would ask: Where has our model gone wrong? What competitive forces have overtaken us? Who is eating our supper? We need that critical introspection in South Africa.”

He says it is obvious that the country should not just keep following the path that led us here.

“That path has seen us antagonise trading partners, dissuade investment, feed corruption and loss-making SEOs, bleed skills, and slide down the rankings on competitiveness and education,” he says. “Higher taxes and onerous regulations have made us increasingly unappealing as an investment and employment destination.”

Nathan suggests taking a commercial perspective on our state’s finances in order to “refocus on our competences and invest in areas that serve the public good and promise a decent pay-back”.

He adds that we should discard those that don’t, which likely “means letting go of the many state-owned assets that are in fact liabilities”.

Nathan said the benefits of taking a commercial perspective would go far beyond unburdening our country’s cashflow and balance sheet. “It would also close avenues of corruption and end the excruciating games that dominate our headlines, thus freeing up the management time consumed by such power plays.”

In competent hands, he adds, these operations could make a positive contribution to the economy. “If not, they must be allowed to fail.”

On the revenue side, the least we should do is foster an accommodating environment, one that beckons foreign investors, retains skills and supports employment.