profile
The need for compromise
FNB Chief Economist Sizwe Nxedlana is positive about the country’s future, and
views the policy proposals contained in the NDP in a positive light.
‘W
e need supply-side reforms to promote a
more sustainable and labour absorptive
economic path. The NDP contains sensible policy proposals to move us in this
direction. However, some of the NDP’s
proposals require reforms to existing policies that are sacrosanct to
various stakeholders meaning that its successful implementation
will require compromise. But our young democracy was built on
compromise, so there is a precedent,’ says Sizwe Nxedlana, the recently appointed chief economist of First National Bank.
In his spare time Nxedlana, who obtained a BCom and MCom
from the University of Cape Town and KwaZulu-Natal, is an avid
reader of economic magazines and follows national and global economic trends. He admits the decision to become an economist was
not one that was difficult to make. ‘From a very young age, I wanted
to find out why things were the way they were; for example, why
people like me (blacks) were poor. That is what led me to study economics, and I am privileged in that i get paid to study and try to
answer interesting questions,’ he says. Nxedlana brightens up when
asked about the NDP, the country’s economic challenges and the
role of government and the private sector to drive economic growth.
‘You might say I’m a naturally optimistic person and I tend to see
the glass as half full rather than half empty, due to the progress that
I’ve witnessed over the past15 years,’ he says.
So what does he think of the NDP with its core thrust to eliminate
poverty and reduce inequality by 2030?
Nxedlana says that the NDP is a credible list of supply-side reforms detailing government’s strategy to promote sustainable economic growth. But, he says, its successful implementation faces hurdles which will require compromise. The pressure points include,
labour relations, a perceived lack of policy coordination within
government, insufficient energy and a sub-optimal logistics chain.
Ultimately progress on the above will require a consensus approach
where government, the private sector and the labour movement
continue to engage constructively to reach a common vision on how
to balance their various interests.
Pressure on labour costs is rising across South Africa as trade
unions become more militant, demanding salary and wage increases that are above inflation. Trade unions cite spiralling living costs,
fuelled in part by a spate of increases in administered tariffs such as
electricity and municipal rates.
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