JOHANNESBURG – The IMF says South Africa’s economic growth is too low to improve the lives of those without jobs.
The IMF is in the country to meet with government and business officials after revising growth estimates for this year down from 0,6 to 0,1 percent.
The organisation says South Africa’s economy has yet to live up to the democratic promise of 1994, acknowledges the country’s achievements and improved infrastructure.
However, poor governance, corruption and policy uncertainty are dragging on economic growth.
And while external factors play a part in low growth, some problems are self-inflicted.
“There are various governance issues. I mean referring back to what happened last year with the sudden change in the Treasury, which caused a lot of uncertainty and the running of state enterprises and policies,” IMF first deputy managing director David Lipton said.
The IMF has cut its global growth forecast for this year to a 3,1 percent, from 3,4 percent.
It believes South Africa’s economy will be more affected by developments in China, than those in the US and the UK.
The organisation says South Africa has done well to manage growth after the financial crisis, but says it now needs advanced policies to boost growth and action.
Lipton says, it’s a burden to have more than a third of the population to be without jobs, but part of the growth recovery story becomes those seeking employment, because the inclusion of those who are unemployed can boost growth.”
Lipton says a business environment that creates dynamic opportunities for energetic small companies can become an engine for job creation.
The IMF advises that in order to boost investment locally and internationally, the country has to be more competitive in terms of taxation, tariff prices and efficiency.