Dawie Roodt has a theory about South Africa’s economy that boils down to something most business owners have suspected for years: the country is not short of potential, it is short of getting out of its own way. The chief economist at Efficient Group told Moneyweb that a series of policy adjustments could make the national economy grow considerably faster, which would create a genuinely more favourable environment for SMEs that depend on consumer demand and credit access to function at all.
Roodt frames policy changes as government actions touching taxes, regulation, public-sector efficiency and infrastructure spending, and argues that when those levers move in the same direction rather than working against each other, the cost of doing business falls and investment picks up. For a typical small firm, lower tax compliance costs and faster licence approvals translate directly into more usable cash flow and a genuine ability to hire, rather than an abstract macroeconomic improvement that never quite reaches street level.
Why this diagnosis is not exactly new
South Africa has struggled with low GDP growth for years, often hovering below 1% annually, alongside stubbornly high unemployment, especially among young people, and widespread SME difficulty accessing affordable finance. Roodt’s remarks echo a broader consensus among economists that structural reform, not another stimulus cycle, is what is needed to unlock capacity the economy is not currently using.
He did not offer a detailed reform shopping list, but flagged three areas analysts commonly point to: simplifying the tax code, improving the predictability of regulatory decisions, and accelerating investment in transport and energy infrastructure. Each of those, in isolation, sounds modest; together, they would meaningfully lower operating costs for a small manufacturer, a retail shop or a tech start-up trying to plan more than one quarter ahead.
Roodt’s view is his own assessment, but it is consistent with recent policy discussions inside Treasury and with National Treasury’s own growth strategy documents, which likewise point to fiscal discipline and a more business-friendly regulatory environment as the path forward. What remains genuinely uncertain is timing and scope: reforms discussed in a strategy document are not the same as reforms actually implemented, and the gap between the two has been where plenty of good South African economic policy has quietly stalled before.
For SME owners, the practical response is not to wait for a grand reform announcement but to track the specific, smaller signals: upcoming budget statements, regulatory announcements, any concrete movement on the three areas Roodt named. Businesses positioned to adapt quickly to new tax rules or take advantage of improved infrastructure, rather than reacting only once change is fully implemented, stand the best chance of actually capturing the upside of a faster-growing economy, assuming this particular round of reform talk turns into more than talk.
South Africa has heard versions of this diagnosis before, often from credit rating agencies rather than local economists, and the recurring theme across all of them is remarkably consistent: the country’s problem has rarely been a shortage of good policy ideas, it has been the gap between identifying the right reforms and actually implementing them against entrenched interests and institutional inertia. Roodt’s framing is notable less for originality and more for coming from a private-sector economist whose clients, SME owners and investors among them, are the ones directly bearing the cost of that implementation gap every year it persists.
There is also a useful discipline in how Roodt has chosen to frame this, resisting the temptation to promise a specific growth number attached to a specific reform timeline, the kind of overconfident forecasting that has embarrassed plenty of economists before him. Structural reform in an economy this size rarely produces a clean, attributable growth bump on any predictable schedule, and an honest economist saying policy shifts could speed growth, without committing to exactly how much or exactly when, is arguably more credible than one offering false precision on a question this genuinely uncertain.
