PwC South Africa Economic Outlook - September 2024

Johannesburg - PwC South Africa Strategy is pleased to share its ninth South Africa Economic Outlook report for 2024. This edition looks at results from PwC’s Global Youth Outlook 2024 on what South African surveyees had to say about the United Nations’ Sustainable Development Goals (SDGs). As leaders of tomorrow, young people are the most affected by the choices and actions we make today.

In July 2024, President Cyril Ramaphosa said the Government of National Unity (GNU) would draw on the SDGs, among other sources, to help determine its Medium-Term Development Plan. The SDGs represent the commitment to a brighter socio-economic future, based on a set of 17 overarching targets. These goals are one of the measures available to track economic progress over time at a much more nuanced level than measurements of, for example, gross domestic product (GDP) can.

Lullu Krugel, PwC South Africa Chief Economist and Africa Sustainability Leader, says: “The SDGs guide us to a better tomorrow. They set out what we as a society should strive for in order to reach a sustainable and equitable future - and the youth will play a critical role in achieving these goals with the decisions they make today and tomorrow. Young South Africans are key to the country’s socio-economic development and must embrace the opportunity - and responsibility - of making an impact on how the country achieves its SDGs.”

In June, the United Nations reported that South Africa ranks 115th out of 167 countries in progressing towards achieving the SDGs by 2030. Gender equality and partnerships for the goals are the targets where South Africa has performed the best. The UN noted that the country has achieved, or is on track to attain, some 33.8% (one in three) of the 213 indicators that comprise the 17 SDG categories. The country has unfortunately seen limited progress on 43.2% of goals, with 23.0% of goals seeing a deteriorating trend.

For South African youth, social issues like water and sanitation, education, health and zero hunger are top of mind when asked to prioritise the SDGs. This reflects the everyday situation that many of South Africa’s young people live in: where water supply is unreliable, sanitation is insufficient, education delivery suffers from many challenges, public healthcare systems are overburdened, and many people go to bed hungry. Water, education and health are key factors in supporting economic development. Clean water and sanitation (SDG 6), for example, is essential to economic development as these improve public health, reduce healthcare costs, and increase labour productivity.

Shirley Machaba, PwC Southern Africa CEO, says: “Achieving the SDGs requires the participation of all demographic segments of society, with youth playing a critical role. The engagement and contribution of South Africa’s youth is essential to the progress we make in achieving the SDGs as young people bring new vitality, inventive ideas, and fresh perspectives to the table. Their digital nativity gives them the skills to navigate the complexity of our connected world and devise innovative solutions for the problems of today and tomorrow.”

Our youth survey shows that clean water and sanitation (SDG 6) is the most important goal for young South Africans. While South Africa can be proud that 94.5% of its people have access to basic drinking water services, there are constraints on the volume of water that can flow through these pipes. Our society needs to do more with the water that it currently has access to. This requires adopting a culture of preserving water through behavioural changes at the end-user stage.

Practical steps to improve the use of available water resources include not washing vehicles with hosepipes, fixing leaking taps and cisterns, and (where possible) increased rainwater harvesting at a household level. At a municipal level, local authorities need to implement demand management and water conservation requirements for all their customers. This includes, for example, running programmes around pipe replacement, exploring water reuse for industrial purposes, and implementing penalty tariffs for those residents or businesses that have excessive water use.

Nino Manus, PwC South Africa Water Management Partner, says: “South Africa can be proud that such a large share of the population is able to access water supply infrastructure. However, with constraints on the volume of water that can flow through these pipes, South Africa—a dry country by global standards—needs to do more with the water that it currently has access to. This requires adopting a culture of preserving water through behavioural changes at the end-user stage.”

Over the past decade or two, the perceptions of the role of business in society have changed dramatically. There is greater focus on how enterprises impact the world around them. Private enterprises need to have a purpose that addresses societal challenges like the SDGs while making profit, rather than exclusively focusing on financial returns to shareholders. Our survey shows that four out of 10 (40%) South African youths believe that the business sector is doing enough to support the SDGs. Conversely, the majority of youth (60%) are not convinced that private business is doing enough.

Incorporating SDGs into company culture will help enterprises achieve the triple bottom line—people, planet and profit—and positively contribute to South Africa’s socio-economic development. The business sector also has a direct interest in countries achieving their SDGs. For example, improved educational outcomes would create more productive employees. Achieving the various goals will result in a more prosperous society which, in turn, is good for private businesses who are dependent on prosperous economies buying their products and services.

Strategy& uses a four-step process to integrate the SDGs into an organisation:

• Goal prioritisation: Companies need to select specific SDGs to focus on. Aside from the fact that 17 goals are too many to focus on, it is also not in the scope of most organisations to make an impact on such a wide spectrum of societal goals through their day-to-day operations.
• Strategy and implementation: Companies need to determine what their specific objectives for the SDGs are. This involves setting an ambition within their context for every goal. It is also important to understand what is already being done within the organisation, and how this aligns with the vision and strategy developed.
• Measuring and reporting results: It is essential to measure the impact an organisation is having on the SDGs both in terms of telling the story, but also to avoid being accused of “rainbow washing” where an organisation reports to positively impact an SDG but cannot substantiate these claims.
• Raising awareness: Improving SDG awareness is an ongoing process and happens in parallel with all the other integration steps. It is key in ensuring focus on the SDG process and buy-in from the relevant people in the organisation. In addition, this step supports internal stakeholders in holding the organisation accountable to the targets they set.

At PwC South Africa, we try to lead by example. By walking the talk on important matters, we help inspire our clients to do the same, and learn valuable lessons along the way about how to build trust in society and solve important problems. In other words, while we assist clients in incorporating SDGs into their organisational system, we also integrate these goals into our own operations. This approach underpins our commitment to addressing South Africa's pressing challenges.

PwC's Our Humanity strategy is a catalyst for positive change and societal impact. This strategy is also intricately aligned with the SDGs. Our approach to having a positive impact on these goals is founded on three key pillars, namely firm-wide initiatives, client-focused solutions as well as community engagement and support.

Key content in this report includes:

• Development progress: South Africa has reached, or is on track to achieve, a third of the SDG sub-indicators
• SDG priorities: Water and sanitation are the most important for South African youth
• Action gaps: Young people feel the business sector is not doing enough to support the SDGs
• What private companies can do: Four-step process for integrating SDGs into organisations
• Walking the talk: PwC South Africa incorporated seven SDGs into our business strategy