The South African government must introduce further reforms to improve the ease of doing business in South Africa or risk losing valuable skills and competition, said Massmart Group Chairman Kuseni Dlamini.
Writing in the group’s latest annual report, Dlamini noted recent positive developments in the power sector that will enable private sector organizations to produce up to 100 MW of power. He added that the move to auction spectrum is key to positioning South Africa in a digitized global economy.
“These are encouraging signs; however, there is still work to be done, in particular to unlock the full potential of our tourism market by facilitating access to visas for tourists wishing to visit South Africa. We are located at some distance from the centers of world economic activity and therefore we must do everything possible to facilitate the visit of our country.
“If South Africa is to grow and prosper and if our businesses are to compete globally, we need access to scarce talent. So we also need to make the visa process for people wanting to work in South Africa easier and more user-friendly.
Dlamini noted that South Africa still faces challenges with its state-owned entities (SOEs), such as Eskom and Transnet, which are holding back the economy.
“We need serious and urgent action from the government to fix our state enterprises. They play a key role in South Africa’s ability to compete globally. When they don’t perform optimally, it has a negative impact on job creation, economic growth, our GDP and our foreign exchange earnings.
“Fixing them is key to South Africa’s economic growth. The water crisis and the inefficiency of our Water Boards is another issue that the government must urgently address, along with infrastructure. Now is the time to act, not nice words. We need tangible progress.
Service delivery failure
Dlamini warned that South Africa is also lagging behind in its service delivery at the local government level.
“We need to build capacity at the local government level because business operations are influenced by local government performance.
“We need to make sure that councils, mayors, municipalities and metros are all fit for purpose and for the future, that they work efficiently, that there is no corruption and that we have qualified, competent, capable and willing people who can lead world-class municipalities, which is ultimately where economic activity takes place.
From a national perspective, South Africa needs to redefine the need for capacity building at the local government level, Dlamini said.
“South Africa is a country with incredible potential, but that potential will only be realized if we all work together to create the conditions that enable our mutual success.”
Massmart, the owner of Makro and Game in South Africa, reported a 65% decline in overall earnings per share for the 52 weeks ending December 2021, to a loss of 705.5 cents per share, while the group reported a loss for the year of R2.2 billion, down from R1.75 billion previously.
Massmart said total group sales for the 52 weeks ended December 26, 2021 of R84.9 billion represented a 1.9% decline from the same period in 2020, while comparable store sales declined. increased by 1.7% over the same period. The group again waived the right to declare a dividend for the period.
It said it generated a trading profit of R195.4 million, despite the severe impact of civil unrest. This was achieved through partial offsetting of civil unrest losses from insurance proceeds and a sustained 1.2% decline in expenses.
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