Partnerships, education tweaks will clear SA's path to global competitiveness

Economic misery is a reality for 11 million South Africans who survive on approximately less than R28 per day. Despite strict labour laws, minimum wages, and exorbitant taxes, South Africa's economy is on an uncontrollable downward spiral. Shockingly, government officials remain entangled in endless corruption scandals while wasteful budget expenditure remains rampant. Extreme poverty is estimated to have increased by 9% which will leave a devastating legacy of debt and misery with the next generation.

This grim reality is buttressed by the strict lockdown as enforced by the National Coronavirus Command Council (NCCC). Regrettably, the NCCC's decisions have reduced industries to rubble and arrogantly infringed on constitutional rights. However, regardless of South Africa's gloomy socioeconomic outlook, there may be a silver lining to the dark cloud covering the nation.

In the 2020
Global Competiveness Report by the World Economic Forum (WEF), governments are urged to rethink active labour market policies, scaling up reskilling and upskilling programmes, and to update education curriculums. Thus, incremental steps to liberate the private sector from regulations, focusing on skills training and reimaging the nation's education system to encourage school choice will propel South Africa to global competiveness.

Encouraging opportunities have already sprung up for South Africa. As of 1 January 2021 the African Continental Free Trade Area (AfCFTA) came into effect. Arguably, it presents a golden opportunity to reduce poverty, boost incomes, and develop South Africa's decaying economic infrastructure. It is
estimated by the World Bank that AfCFTA will lift 30 million people out of extreme poverty by 2035. Importantly, people from Southern Africa living in extreme poverty would decline by 3,9 million.

This is primarily because the AfCFTA eliminates regional trade barriers and lowers trading costs, which improves long-term growth for South Africa and other African nations. Ordinary people will be the biggest winners under this new trading bloc.

Ironically, South Africa's government champions various quotas and taxes on businesses, yet signs onto the AfCFTA which markedly reduces such barriers on trade across the continent. The good news is that the solution to South Africa's economic turmoil is to implement a similar system of trade within our borders.

Market liberalisation takes place when individuals are allowed to use their capabilities and skills to drive economic prosperity and productivity. For South Africa, in spite of socioeconomic challenges, skills training and education are crucial. Yet, automation could pose the greatest threat and opportunity to South Africa's economy. Alarmingly, the WEF found that 32% of OECD countries are at "significant risk" of automation.

While the global technological revolution is expected to displace thousands of jobs in various sectors, upskilling workers by providing digital skills training would prove pivotal for future development. Training through learnerships and placing emphasis on technical skills would impact South Africa's job market positively. During the pandemic, the Western Cape government for instance
created 4,980 jobs by merely providing skills training in partnership with the private sector.

South Africa's redefining moment will arrive when citizens are placed above party politics, and strategies are recognised for efficiency instead of for political ideology. Widely implemented skills training programmes, such as in the Western Cape, will halve unemployment. Such programmes ensure that individuals are in possession of in-demand skills and capabilities which are crucial to progress across South Africa.

Another factor to bear in mind is the decaying infrastructure and ineffective curriculum plaguing public schools. Shockingly, there are
nearly 4,000 pit-toilets at schools across the country and, while the Department of Basic Education has notably updated the curriculum, public schools still receive weaker curriculums when compared to their private counterparts.

The solution is school vouchers. Possession of such a voucher means the government subsides the cost of tuition at a school (public or private) of the parents' and child's choice, as opposed to the current dispensation where government decides where children must go to school. Parents can add additional amounts to the voucher amount and send their children to a better school.

Crucially, this policy would introduce choice and therefore competition. Schools that underperform will be at risk of losing all their students – and as a result, all of their resources – and thus will start trying to compete with better schools. This competition between schools will improve the quality of education, and as a consequence, enhance the holistic development of children across South Africa. The long-term prosperity of society at large will increase as children with better educational development have a better chance of succeeding later on in life.

Despite 26 years of government plans to improve public schools, the current school system is untenable. The alternative – school vouchers – will give parents greater autonomy and significantly reduce ineffective government spending plans. It would force schools to compete for learners thus offering quality education, including at public schools. South Africa's prosperity is uniquely intertwined with educational development.

South Africa's path to economic resurgence is possible if government liberates the private sector – which includes all entrepreneurs, not only big businesses – prioritises skills training, and provides parents with school choice. Businesses able to operate freely will produce jobs, while a citizenry equipped with in-demand skills and a competitive educational system will propel South Africa to global competiveness.

This article was first published on City Press on 8 February 2021.

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