A few weeks ago, I found myself walking through the bustling, chaotic streets of a century old market in Hyderabad, India. The cacophony of merchants hawking their wares, the vibrant colors of spices laid out like mosaics, the hot corn serving food stations and the palpable energy of enterprise were simply captivating. Wave after unending wave of traders, with little more than grit and determination, were eking out a living in a city where there is as near-as-makes-no-difference no social safety net to catch you if you fall. No basic income grant, no poverty reduction grant, no old age grant,indigent grant or poor health grant. It struck me that for these people, survival was not a matter of waiting for the government to intervene; it was all on them.
The number of micro business people, traders, merchants that I met who simply blended into the grey background honestly left me feeling a sense of unease. In today’s world of “stand-out and be seen” economics where the real and tangible to building a business based on a strong brand, a differentiated product and well-priced customer proposition, how can so many – literally thousands – wake up to a life of become just another spice merchant.
I have reflecting deeply on this question.
I was raised in a small township, Wattville, on the East Rand of Johannesburg. My township traces its history back to the mineral industrial complex that was fueled life in the eastern and southern townships and suburbia of Johannesburg. Gold, copper, sulphur, steel and coal mines were a critical part of the Apartheid economic model. Around these mines developed factories to process and manufacture use these raw materials. The Apartheid then dug the fallow ground and laid thousands of kilometres of cobble stone and stone crete on top of which they would then lay a rail network to connect the industrial, productive and consumption hubs of the country. Mines where connected to factories, factories connected to warehouses, warehouses connected to distribution centres and distribution centres connected to plazas, malls and retail outlets. For those who still have not caught the memo,this was how the South African economy was orchestrated.
Next to each of the factories and warehouses were a sprawl of unplanned and planned urban settlements, which we would later come to call townships. Most of these townships, as is the case today, had a population growth higher than the available housing. This meant that there was always a problem of unplanned settlements, mkhukhus. Until the state would regularize these and build affordable housing.
Wattville, my home of birth and upbringing, is a model of this story. Next to each of these townships would develop another settlement that was home to predominantly Indians. For Wattville, this settlement was Actonville. A trading smorgasbord of shops, meat markets, bakeries, dry cleaners, fish and chips shops amongst many where the trading took place. Most notably each of these townships and the shops in them would close in the middle of everyday for the proprietors of the stores to attend Mosque.
Where the black townships were a vibrant fire of Christian churches in building, under stress and even on somebody’s backyard, the Indian township were filled with Mosques and Hindu temples.
Imperfect, unequal and separated, was the South African economy.
When I consider this backdrop and ask myself how we modernize the South African economy to compete with its global counterparts? To be clear, South Africa like every market, competes daily for economic and political resources so that it can develop its economy. Even to those that think we don’t need to compete, we do. And we are. The question is, “how effectively are competing right now?”
My thesis is this: South African need to realise that there is no saviour coming. We are on our own. And the best opportunity we have to create a growth economy is to build that economy to support and reward talent and risk taking.
This is the spirit of those traders and merchants that I observed in Hyderabad. Ask yourself, “How can so many people live in an environment where so many people live, compete, raise families and seek to build dreams? How can you build a life in a sprawl of uncoordinated competition?”
You have to reduce the system to four component parts:
a. Personal ambition & agency.
b. Institutional design;
c. Reward Talent & Risk taking;
d. Industrial capacity & production for export
India and Vietnam showed me a simple truism: when you strip away expectations of external saviors, what emerges is an unrelenting drive to create opportunities out of nothing.
Hawu Vusi, Why Vietnam now?
Vietnam is a modern phenom, A story of how an economy and its people can rise from the ashes. Decades ago, the Vietnam War left the country ravaged, in a middle of a famine and little to no industrial capacity. The infrastructure was in ruins, and the people faced immense hardships. Forced by the circumstance and a lack of choices, Vietnam embraced the economic doctrine of Doi Moi, a series of sweeping economic reforms that transitioned the country to a market-oriented economy.
Today, Vietnam is a manufacturing powerhouse, with thriving export sectors in electronics, textiles, and agriculture. Its GDP growth rate of 6.8% (2024) is a testament to the resilience of its people and the vision of its leaders. But there’s an eerie similarity here for South Africans: Vietnam’s rise was born out of necessity, much like the survival-driven dynamism I saw in Hyderabad’s markets.
The South African Paradox
Post-apartheid South Africa mirrors Vietnam’s post-war rebuilding phase in many ways. Both nations emerged from periods of profound structural inequality and systemic disenfranchisement. Yet, while Vietnam surged forward, South Africa finds itself at an economic crossroads. Our economic growth rate has been an anemic 1% CAGR of the past decade.
Unemployment remains stubbornly high at 33.7% (StatsSA, 2024), with youth unemployment rates even more alarming. Our labor absorption rate lags behind global standards. The question is: How do we harness the entrepreneurial spirit of Hyderabad’s traders and Vietnam’s strategic vision to transform South Africa’s economy? What are the hard decisions that our country needs to make?
Here is my list of what-to-dos. Now some of these will not be new, It is entirely possible that you have previously read on some of these suggestions before but this is the problem with South Africa and the leaders we elect, they have a propensity for willful and self-selected ignorance. They have the documents, the research papers, the thought leaderships articles and the think tank to make the changes. But it appears that there is concerted effort to keep the country poor. From my vantage I can see a myriad donor-led and not-for-profit organisations whose reson d’etre is simply keeping the country poor by ensuring that the political and economic leaders don’t do what they know is the right thing to do.
Back to my to-do list:
1. Policy and Political Decisions for Growth
If South Africa is to achieve a 3% growth rate in the next three years and 6% within a decade, we must make bold decisions now. Here’s how:
a. Infrastructure as an Economic Catalyst
Economic growth requires a backbone of robust infrastructure. Recall my example of how the Apartheid state industrialised the townships even on the peripheries of Johannesburg to create growth? This is what we need to do but modernized.
What do you need to do to achieve that you might ask?
1. Rebuild Road & connected logistics infrastructure. This means we must expand and modernize road, rail, and port networks to facilitate trade. Unlock the clog that is currently impending the ports. Ports are where the country’s economy get oxygen. It is vital that they are optimized for efficiency and throughput.
2. Modernise the Urban and Peri-urban centres so that they are part of the Digital Economy. While in Hyderabad I visited depots and factories from which merchants were selling their products on websites around the world. The internet presents an opportunity to bring the unemployed population into the economy without the constraint of industrial infrastructure. Why are not using this opportunity? In Vietnam the local governments extended broadband access to underserved regions, enabling e-commerce and digital entrepreneurship. This is a low cost but high impact opportunity.
2. Reviving the Manufacturing Sector
South Africa’s manufacturing sector has stagnated, but targeted incentives can breathe life back into it. There is a severe disconnect between the funding agencies and the already established Special Economic Zones (SEZs) that offer tax incentives. Consequently, funding agencies have not yet fully maximized the opportunity to lower the cost of capital for new factories that are aligned to the country’s export potential.
Industries such as agro-processing, and light manufacturing are low hanging fruits. Most South Africans are not aware is the largest exporters of fertilizer product and component material into much of the sub-continent. Agricultural sectors in countries such as Zambia, Mozambique, Angola are reliant on companies like Omnia (in South Africa) for the stability of the agricultural sectors. We have the productive capacity to supply the rest of the continent, and the SEZs to incentivize the funding of these capacities. Why are we moving at this snail pace with the execution of this opportunity?
3. Cultivating a Skilled Workforce
The economic future depends on the quality of our human capital. South Africa needs to align its vocational training programs with the strategic priorities of the country. One hopes the introduction of the QCTO will aid in this work. But the broad theme is that we should be incentivizing institutions of learning and development that are training citizens with skills aligned to our national objectives. To date we have tended to offer and all and sundry approach that’s left us why too many graduates holding certificates in a field where there is no demand for skills or labour.
Our focus should be on STEAM education, promoting sciences and rewarding innovations.
4. Streamlining Governance and Fighting Corruption must be amongst the top 5 priorities of the nation.
Vietnam just jailed the wealthiest woman in that country along with a truckload of officials and office bearers for corruptions. The United States just charged Adani for corrupt practices. The law only draws confidence when citizens see it applied even to most powerful in society. Corruption erodes trust and economic potential.
So how do we lower the risk of corruption?
a. transparency: we should Implement open procurement processes and public accountability mechanisms. Using blockchain we can fundamentally transform the procurement function in government. Every decision, every submission, every tender, every tender committee all recorded and made available for all citizens on a public ledger. Stemming corruption is not just about prosecuting when it occurs, it is also about minimising the potential for it to occur.
5. Leveraging Trade and Regional Integration can be a game changer for the economic growth story of South Africa, As the dominant economic and military power in central and southern Africa, South Africa should be accelerating its program of establishing trading portals with the rest of the continent, Not just as a destination for our products but also markets for investment in primary industries, Why is South Africa not building ports and roads in Zambia- like the Chinese – in an effort to aid trade between the countries? Why do we not operate ports in Mozambique that we have funded and through which we can reach global markets.
These are bold ideas; I imagine even sacrilege for some of you reading this piece. But this is the state of the global economy. And only being inwardly focused doesn’t build a resilient economy.
Take the African Continental Free Trade Area (AfCFTA): you cannot actualize that agreement without a strong regulatory framework, stable currency and robust dispute resolution mechanism. Why is South Africa not positioning itself as the platform? Use South African banks for settlements, Use South African capital markets for capital raising. Use South African stock exchanges for creating liquidity instruments.
South Africa leads the continent.
Why are we not leveraging and extending this lead? Not for purposes of exploitation but for mutual development.
6. Fiscal Discipline and Innovation
Sustainable fiscal policies are crucial.
• Maintain debt levels within manageable limits while investing in growth-enhancing sectors.
• Incentivize research and development (R&D) in high-growth industries like technology and green energy.
What India, Vietnam, and even those traders in Hyderabad teach us is that resilience and resourcefulness are vital—but they thrive best within an enabling environment. The state must shift its role from being the primary provider to an enabler of opportunity. This means focusing on infrastructure, education, and governance while empowering individuals and businesses to take charge of their futures.
Vietnam’s transformation shows that bold reforms and a commitment to export-driven growth can create jobs and lift millions out of poverty. India’s evolution demonstrates the power of entrepreneurship and innovation when unleashed in a market-driven economy.
South Africa has the potential to be a beacon of hope for the African continent, but potential without action is merely a dream. The choices we make today will determine whether we realize the vision of a prosperous, inclusive nation. It’s time for policymakers, business leaders, and civil society to align in pursuit of bold, transformative growth.
We must refuse to settle for mediocrity and instead aim for nothing less than excellence. If the people of India and Vietnam can rise from the challenges of their pasts to become global economic players, so can we.
It begins now. It begins with us.
Vusi Thembekwayo
Global Speaker. Investor. Author.