SA must implement structural reforms to accelerate economic growth.
By Lehlohonolo Lehana.
Finance minister Enoch Godongwana says government is focused on rebuilding South Africa’s economy. However, there are several necessary structural reforms that must be implemented to get things back on track and improve private investment.
Addressing a national investment dialogue on Thursday (30 September), Godongwana said that at the centre of the country’s economic reconstruction and recovery plan is the goal of building a ‘new, fast-growing, more inclusive economy’; propelled by greater levels of public and private sector investment.
"We are very clear that the challenges of poverty, unemployment and inequality will only be effectively addressed through higher levels of inclusive economic growth. Specifically, our recovery plan calls for the mobilization of both public and private sector investment to drive an infrastructure-led recovery," he said.
However, Godongwana acknowledged that there are five key issues that need to be introduced to encourage private investment:
- Reform the electricity supply industry: "Since 2008 we have spent most of our time trying to fix Eskom without improving the electricity supply. It is my considered opinion that the electricity supply industry must be completely overhauled, and we must reduce our dependency on Eskom."
- Deal with the spectrum issue: "It is a matter which has been a problem because, for more than 12 years, we have had 11 ministers, each with their policy and undermining the need for auctioning spectrum and making cheap data available to the economy."
- ‘Green’ the economy: "This should not anchor this on Eskom’s reforms. There must be a national effort to green this economy."
- Improve logistics capacity.
- Address the general cost of doing business in South Africa: "I’m told that to have your zoning license takes 80 days in some municipalities, but two years in others."
Our part as government must be of necessity to build a conducive environment for greater and sustained investment into our economy.
"What we are grappling with is the instrument that we can use to enable the private sector to invest in public infrastructure. Last week we met with the Association for Savings and Investment South Africa, and we agreed on working together to develop an appropriate instrument that will enable the private sector to participate in the delivery of infrastructure.
"The regulatory burden has got to be changed," Godongwana said.