PRETORIA, The South African government says it concurs with the findings of the latest Economic Survey on South Africa by the Organization for Economic Co-operation and Development (OECD) that reforms are needed to revive economic growth in this country.
The report, which notes that while South Africa has made tremendous progress in the last two decades, reforms are necessary to spark economic development. It was presented by OECD Secretary-General Angel Gurria to South African Finance Minister Malusi Gigaba here Monday.
We agree with the observations made in the 2017 Economic Survey that, among others, boosting entrepreneurship and growing small businesses will contribute to creating jobs. We also agree that entrepreneurship in South Africa is low compared with other emerging economies ….. the government is in the process of finalising a complementary government fund aimed at financing SMMEs (small, medium and micro enterprises) in the start-up phase,” said Gigaba.
We further agree with the observation that the quality of the education system and lack of work experience contribute to gaps in entrepreneurial skills and, in that regard, government policies will provide more support for entrepreneurs and small businesses.”
Gigaba said State-owned companies (SOCs) could play a role in advancing the objectives of employment and inclusive growth, particularly by targeting micro enterprises and black-owned small businesses. From April 2017, 30 per cent of every large contract must be, where feasible, sub-contracted to SMMEs.
Reforms in the telecommunications sector would be supportive of entrepreneurs and small businesses through reduction of costs to do business, said Gigaba.
The report noted progress such as almost 90 per cent of households having access to piped water and 84 per cent having access to electricity. However, challenges remain, it added.
South Africa has made huge strides and a lot of progress [in] delivery of services to millions of citizens, said Gurria, noting that South Africa, however, remains a highly unequal society. Low employment rates, especially for black South Africans, contribute to high income inequality. When inequalities are high .. this feeds frustration and perceptions of corruption.
Last year, South Africa faced low investments. The drought also reduced gross domestic product (GDP) growth to 0.3 per cent. The OECD — which is an international organisation that promotes policies to improve the economic and social well-being of people worldwide — forecasts growth to remain sluggish at 0.6 per cent this year, picking up to a moderate 1.2 per cent next year.
Looking ahead, more needs to be done to achieve growth but also inclusive growth, Gurria said.
Source: NAM NEWS NETWORK