South African finance minister Tito Mboweni has announced an economic growth plan aimed at kick-starting the country’s economy
Calling the current economic trajectory unsustainable, the 75-page document lays out his hopes for how to tackle a 29 per cent unemployment rate and boost economic growth.
This includes modernising network industries, supporting SMEs, prioritising labour-intensive growth and implementing more flexible industrial and trade policies.
The hope is that in combination, all of this can boost growth - which has averaged 1.12 per cent in the last five years - by 2.3 per cent and create around a million jobs, though the plan stops short of putting a timeline on this.
The document has emphasised that the government should urgently implement a series of reforms that can boost South Africa’s growth in the short term while creating the conditions for higher long-term sustainable growth. These growth reforms should promote economic transformation, support labour-intensive growth and create a globally competitive economy. An attempt to raise South Africa’s potential growth rate must include progress on the fundamental building blocks of long-run sustainable growth. These include:
· Implementing youth employment interventions such as continued support for government programmes that incentivise job creation and apprenticeships that facilitate school-to-work transition based on close cooperation between institutions of learning and the private sector.
· Expanding effective, affordable and integrated public transport systems and prioritising targeted housing and urban development interventions to overcome spatial legacies.
· Delivering a capable state supported by a new compact between the government, private sector and other social partners. Government’s commitment to the compact should prioritise strengthening the capability of the public sector and state-owned entities as well as achieving the right balance between policy progress and certainty to ensure the economy is able to attract investment.
· A stable macroeconomic policy framework underpinned by a flexible exchange rate, inflation targeting and credible and sustainable fiscal policy
