Call for Presidency and DFIs to focus on 'high-growth' startups to move GDP needle

THE International Monetary Fund's (IMF) economic growth revisions of South Africa to a meagre 1,5% in 2025 and just 1,8% by the end of the decade should be, and is, cause for alarm.

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This as growing tensions expand between one of South Africa's largest trading partners, the US, which saw its new President impose, and then walkback from, the hefty 30% tariffs inflicted on all imported goods from South Africa.

Coupled with rising internal tensions threatening the Government of National Unity, the IMF's assessment is a call to act.

It is with this in mind that the Presidency was recently engaged to strongly emphasise the need to breed more homegrown startups and unicorns, which are businesses that surpass the $1-billion in valuation.

Gol was the first from our shores, followed in quick step by and most recently Patrice Motsepe's TymeBank, with many more coming up through the ranks.

It takes blood, sweat and tears to take a fledging SMME to a mighty high-growth startup, and as we see on a daily basis, South African entrepreneurs indeed have the grit to achieve it.

They however need broader, more sustainable investment and support from the government to get there.

While once South Africa was the darling in the African continent's crown with regards to attracting Foreign Direct Investment (FDI), the country has seen that source of international capital wane from an almighty waterfall to a mere trickle of its former self.

Of course, this in large part has to be because the global funding environment has tightened dramatically, affecting startups across Africa, with Venture Capital investments for startups on the African continent declining from their 2021/22 peaks.

Nigeria, Kenya and South Africa - all major tech hubs have each felt this plight acutely.

While interest rates and inflation are par for the problem, it often rests squarely on the shoulders of our own government who are moving too slowly and retaining outdated policies and reforms that are not fitting for an evolving country like South Africa.