Economist Moeletsi Mbeki has released his research on the history of the South African economy, detailing how the current climate came into existence. Mbeki has highlighted some of the challenges that hinder growth, explaining how BEE has crippled vital income in SA.
While the cost of living soars, economist Moeletsi Mbeki has written a research paper detailing the history of South Africa's economy, dating back to 1910.
Mbeki has given possible solutions to change the current economy for the better, which he feels includes a move away from the current affirmative action policies.
The economist took years to gather the information and has now come forward to warn that affirmative action has failed to encourage much-needed investment in South Africa.
Mbeki says that in order for the economy to be successful, a number of things need to change. The economist explained that the current model sought to build the black middle class, but did so through state employment and utilising BEE.
He explained that this discouraged possible investors from foreign countries, as they would have to cede 26% of their capital to a BEE partner, who would not contribute to the start-up.
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This model, according to Mbeki, has thwarted economic growth in the country with investors looking elsewhere for their opportunities.
This echos the sentiments put forward during President Cyril Ramaphosa's trip to Brussels early this year, when investors had highlighted the strict laws as one of their greatest hurdles in coming to South Africa to create businesses and fund projects, Briefly.co.za reported.
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