ACCELERATING INCLUSIVE GROWTH
South Africa’s developmental goals are clear: the reduction of unemployment, poverty and inequality; the transformation of the economy to better reflect the country’s demographics; the creation of a just and inclusive society; and the consolidation of our democracy. However, debate about them often fails to acknowledge that they cannot be achieved without robust economic growth sustained for a significant period.
According to the National Development Plan (NDP), the economy needs to grow at more than 5 per cent a year until 2030 if we are to achieve the goals of eliminating poverty, ensuring that 60 per cent of adults would be in work (up from about 44 per cent at present) and reducing inequality as measured by the Gini coefficient from 0.69 to 0.60. In this regard, the NDP is exactly right; if South Africa is to end mass poverty and unemployment, its economy needs to grow far more rapidly. This makes its performance in recent years nothing less than disastrous.
Over the past five years, the economy has grown at just over 2 per cent a year and, following a rapid further drop, is now expected to grow at about 1 per cent a year for the next few years. This is lower than the rate of population growth, which means that however the fruits of economic activity are shared, the average South African will be getting poorer in the years to come.