SA needs to find new ways to boost growth and job creation‚ according to an economic survey by the Organisation for Economic Co-operation and Development (OECD), writes Sunita Menon.
The OECD said wide-ranging structural reforms are required to create growth‚ boost job creation and improve inclusivity.
The survey calls for a range of structural policy reforms‚ such as opening key sectors‚ introducing a national minimum wage‚ developing apprenticeship and internship programmes‚ maintaining macroeconomic stability‚ improving the business environment and enhancing regional integration‚ “which are critical for inclusive growth and job creation”.
According to the survey‚ “boosting entrepreneurship which is low in South Africa when compared to other emerging economies and growing small businesses can also be crucial to economic recovery and job creation”.
Speaking at National Treasury on Monday‚ OECD secretary general Angel Gurria said: “Last year low investment ‚ plus the drought‚ reduced GDP growth to 0.3%. With persistently low business confidence‚ we forecast GDP growth to remain sluggish at 0.6% this year.”
He added that SA remains a highly unequal society and the lack of transparency in public affairs feeds into public frustration and the prevalence of corruption.
On the Reserve Bank’s mandate‚ Gurria said: “That includes an independent inflation-targeting central bank. Fiscal policy is following a moderate consolidation policy.”
Finance Minister Malusi Gigaba welcomed the recommendations made by the OECD.
“It is without doubt that SA is currently faced with difficult economic conditions that we are actively working with to respond to.”
He added that Treasury’s 14-point action plan‚ which was announced two weeks ago‚ addressed many of the OECD’s concerns and aimed to accelerate progress with accountability.
Gurria added: “I have never seen a successful reform programme that didn’t need to be adjusted halfway… accepting the fact that you need to go back to the designers’ table should come organically to the reform process.”
