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South Africa needs a massive, collective heave-ho to put itself back on vital economic growth incline

15th April 2016

By: Martin Creamer

Creamer Media Editor

  

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South Africa needs to find a way to align the goal of promoting economic transformation with that of expanding the economy as a whole in order to open up gainful opportunities for all South Africans.

That message, put out last week by the Centre for Development and Enterprise (CDE) under ‘The Growth Agenda’ banner, is one that makes sense and should be pursued with the utmost vigour.

Made up of seven separate reports that were released last week, CDE executive director Ann Bernstein argued correctly that South Africa needs to change the structure of wealth and opportunity for millions upon millions of its citizens.

The CDE view is correct that getting the relationship right between the transformation of South Africa’s previously disadvantaged people and economic growth is one of South Africa’s most urgent priorities.

Also important is that the CDE did not merely utter words but called for the creation of a body to pave the way for business advances that encourage economic inclusion.

Interestingly, the body that is being proposed to lead such an advance is what is termed a “blue ribbon” commission, the kind of panels that are convened frequently in the US to allow groups of independent specialists to probe given challenges.

Invitingly, the CDE is proposing that business mull the possibility of funding such a blue ribbon commission to look into transformation and growth.

At the same time, such a body can assess ways to build on the economic transformation that has been achieved in South Africa in the last 20 years and find ways of getting rid of their jobless growth baggage as the country goes into the future.

The CDE makes the crucial point that, without economic growth, South Africa’s politics will decline into a progressively disruptive quarrelsome future of diminishing economic opportunities.

There is a sufficient number of top businesspeople in South Africa to assist the South African economy to claw its way back towards an economic growth rate that is sufficiently high to soak up unemployment and ensure that every school leaver and university graduate has remunerative opportunity in sight.

Economic growth matters crucially for all the people of South Africa and the acceleration of such growth simply has to be the top priority for this country.

The CDE is correct to point out that the State has to enable the required economic growth, the private sector has to drive the required growth and the target of that growth must be mass employment.

Citizens must demand that economic growth be formalised as South Africa’s number one priority.

Regrettably, the CDE reports have been produced against the backdrop of slowing South Africa growth, which is poised to fall to less than 1% in 2016 on a combination of domestic constraints and external headwinds that include a slump in commodity prices.

The growth slowdown, together with rising inflation and concerns over South Africa’s fiscal balances, will also feature heavily in the impending reviews by ratings agencies of South Africa’s sovereign rating, which is at risk of being downgraded to junk status.

The country thus needs a massive, collective heave-ho to put it back on a vital growth incline.

Edited by Martin Zhuwakinyu
Creamer Media Senior Deputy Editor

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