IEconomist cites three capitals as key to grow economy
16 May 2014
by Sthembiso Sithole
Chief economist at Pan-African Capital Holdings, Dr Iraj Abedian, says there are three forms of capitals that South Africa needs to get its economy growing again.
Capital means: "Wealth in the form of money or other assets owned by a person or organisation or available for a purpose such as starting a company or investing."
Speaking on SAfm Forum@8 he says first and foremost the country needs to focus on social capital.
Abedian says, "This means building trust, building confident in our own society, confident in our government and business sector."
Another capital that Abedian thinks the country needs is financial capital.
"We are short of financial capital. Financial capital is the next requirement. After people are confident in the economy, government and the institutions, then we need money to invest. For investment to take place, we need to make sure we manage our micro economy because we don’t have enough savings and we have to import capital."
Stressing on the importance of infrastructure capital, Abedian says it is an absolute tragedy that five years later, Medupi power plant is still not finished and Eskom cannot give assurance of supply of electricity.
Medupi is a greenfield coal-fired power plant project located west of Lephalale, Limpopo Province. It is the fourth dry-cooled, baseload station built in 20 years by Eskom.
The name "Medupi" is a Sepedi word which means "rain that soaks parched lands, giving economic relief".
It was expected to start supplying electricity by December last year, but due to contractor performance issues this deadline was delayed.
South Africa's economy is stagnant; our growth in economic activity, stands at a mere 0.2%, according to data from the latest BankservAfrica economic transactions index - Beti.
Speaking on the same programme, CEO of Frontier Advisory, Dr Martyn Davies, says the last time South Africa achieved 7% of economic growth was in 1967.
He says South Africa needs creative, practical solutions to drive growth.
Listen to Dr Martyn Davies on SABC