National Treasury has said that the latest paper offers a detailed examination of structural reforms that may reverse the lingering downward trend in South Africa’s growth potential and competitiveness.
Titled “Economic Transformation, Inclusive Growth and Competitiveness: Towards an Economic Strategy for South Africa”, the hope is that the 77-page plan may raise economic growth from around 1% now to 4%, with 1 million job opportunities possible as a result.
“The paper, prepared by the National Treasury, is an attempt to translate the broad outcomes of inclusive growth, economic transformation, and competitiveness into specific programmes and draw on a range of domestic and international literature to support these policy priorities. This paper considers the contribution of specific growth reforms that can achieve the outcomes of economic transformation, inclusive growth, and competitiveness.
“Weak growth over the last six years is a function of both cyclical and structural factors, although structural factors have dominated, including sharply declining competitiveness,which saw South Africa’s position in the Global Competitiveness rankings fall from 44th to 67th between 2007 and 2018. A series of cyclical once-off shocks such as political turmoil, drought and most recently load shedding by Eskom have further exacerbated the depth of the slowdown. Together, these have served to compound and prolong the effect of weaker confidence, leaving us with an economy that has almost 30% unemployment.”
The plan builds on the much older National Development Plan that failed to gain traction during Jacob Zuma’s presidency.
“The bulk of the interventions are realistically executable in the medium term, and include reforms in the telecommunications, agriculture, services, and transport industries,” the plan states.
Its six main themes include, in Treasury’s words:
- Modernising network industries to promote competitiveness and inclusive growth.
- Lowering barriers to entry and addressing distorted patterns of ownership through increased competition and small business growth.
- Prioritising labour-intensive growth: agriculture and services.
- Implementing focused and flexible industrial and trade policy to promote competitiveness and facilitate long-run growth.
- Promoting export competitiveness and harnessing regional growth opportunities.
- Quantifying the impact of proposed growth reforms.
If you want to comment on the plan, submit them to Rita.Coetzee@treasury.gov.za by 15 September.
Read it in full in the PDF embed below:
(Edited by Charles Cilliers)