- Inclusive growth is central to achieving South Africa’s developmental goals, namely the reduction of unemployment, poverty and inequality, transformation of the economy.
- The National Developmental Plan purports that of the average 5.4% of annual economic growth required to achieve these developmental goals, the national growth record shows that this target has rarely been achieved since 1961.
- Stagnation of the global economy combined with poor choices made by our policy-makers over the decades – manifesting as large public expenditure and public debt – have been inimical to rapid growth.
- Instead of making growth the overriding goal of economic policy, South Africa has: raised the price of some key inputs into the production process that are provided by the state and SOEs; made the business environment more complex, costly and unpredictable, reducing growth of existing firms and the emergence of new ones; and inhibited investment through policy uncertainty, inappropriate policies, and the weakening of ownership rights to assets and property.
- The bottom line is this: South Africa needs accelerated growth that is urban-led, private sector-driven, enabled by a smart state, and targeted at mass employment.