profile
‘Without that compromise, the
required supply side reforms will
not occur and our medium- and
long-term growth objectives will
be stillborn.’
on reaching a compromise on some of the holy cows holding us
back, and that requires leadership from all the major stakeholders.’
‘These are sectors which can help us to achieve sustainable growth
and most importantly can absorb labour and even increase our foreign currency earnings – which will have a positive impact on our
current account deficit, in turn ensuring that our currency does not
come under pressure,’ he says. He acknowledges that expansion of
these sectors will not happen overnight, repeating his belief that
‘a supply-side response is urgently needed if we are to achieve the
objectives of the NDP’.
There are several factors that are constraining the competitiveness of the supply-side sectors of the economy. Labour disruptions
are the most visible. We also need accelerated delivery of power
stations to lift South Africa’s energy constraint. Industrialists have
expressed concern about the reliability of power supplies to support
existing and planned investments.
Eskom has a multi-billion rand expansion project to add generation capacity but miners in particular are concerned that the power
utility might not be able to complete its projects on time. Investment
in the
Information Technology sector is lagging, and countries such as
Kenya have become regional ICT hubs and are attracting investment from global companies such as IBM and Microsoft. ‘We could
easily be the regional ICT centre, but there are constraints on broadband (capacity), cost and reliability, and that is an area which also
needs urgent attention,’ he says.
Another “enabler” of economic growth is the capacity of government to implement its multi-billion rand infrastructure project,
which has been on the cards since the end of the frenetic boom
period leading up to the 2010 World Cup. Soon after the end of the
tournament, government promised it would launch a raft of projects, ranging from roads to water supply projects, to maintain the
momentum created in boosting the country’s infrastructure capacity. This would also create jobs and provide additional work to the
construction sector, suffering under the recession.
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BANKER SA
The roll-out of projects has been slow, although government this
year announced several projects by state companies, such as Eskom
and Transnet, to boost energy and transport capacity. ‘State capacity
on infrastructure investment and its capability to roll-out these projects is critical, and is also an enabler of enterprise and production,’
he says. ‘My concern, however, is that there seems to be a disconnect
between public policy and what is experienced by the private sector
in its dealings with the state. This is something that I hear consistently,’ he says
Without that compromise, the required supply side reforms will
not occur and our medium- and long-term growth objectives will
be stillborn.’ We will remain an economy mired in an unnecessary
and self-imposed mediocrity, underperforming our potential. Confidence would remain muted in such an environment as would fixed
investment.
The supply-side reforms proposed by the NDP will require political will, as well as compromise by all relevant stakeholders. ‘A
compromise will require leadership in the broader context – not
only political leadership but also leadership by labour, government and private business. Without that compromise, the necessary
supply-side reforms won’t occur and our medium- and long-term
growth prospects will be mediocre.’ By Sure Kamhunga ■
Edition 7
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2013/10/17 2:49 PM