Econsult paints gloomy economic picture

Isaac Pinielo | Friday October 30, 2015 15:38

The firm stated in its economic review of the third quarter of 2015 that the situation goes deeper than the current depression in commodity markets.

According to Econsult, this reflects a number of longer-term problems such as unreliable supply of water and electricity.

It said this is an immediate problem in that it disrupts business operations, but also casts doubt on the ability of the state to discharge its obligation to supply basic public services, and its ability to plan and manage large infrastructure projects.

Problems in obtaining work and residence permits for foreign investors and skilled employees, with a lack of transparency in the immigration system and a tightening of eligibility criteria is also said to have resulted in firms being unable to invest and grow, some firms being closed down and jobs being lost as a result.

“There is also slow progress in implementing promised reforms to improve the business climate. 

Slow progress in establishing a framework for public private partnerships (PPPs), even in areas where there is an urgent need, such as independent power producers (IPPs),” said Econsult.

In addition, the firm noted that there is no implementation of privatisation commitments and a trend of establishing new parastatals and public corporations.  It stated that all of these add up to an environment of increasing economic uncertainty, which is a deterrent to investment both local and foreign, and job creation.