What to make of South Africa’s ‘new’ growth plan?
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South African finance minister Tito Mboweni has announced an economic growth plan aimed at kick-starting the country’s stalling economy. Calling the current economic trajectory unsustainable, the 75-page document lays out his hopes for how to tackle a 29% unemployment rate, rampant inequality, and low growth.
This includes modernising network industries, supporting SMEs, prioritising labour-intensive growth, and implementing more flexible industrial and trade policies. The hope is that in combination, all of this can boost growth – which has averaged just 1.12% in the last 5 years – by 2.3%, and create around a million jobs, though the plan stops short of putting a timeline on this.
Sounds good, but little of this is new. By its own admission the growth plan draws heavily on the existing National Development Plan 2030, launched in 2012.
So why bother?
It likely has to do with infighting within the ruling African National Congress between pro-business and figures like Mboweni, and elements pushing for more state control, despite a deteriorating economic outlook. Ongoing public disagreement over the independence of the central bank epitomises the split.
Mboweni’s growth plan – which still needs to be adopted by the cabinet – is laced with language likely to stir more disagreement.
The apparent goal is to force the issue of meaningful economic reform onto the policy agenda.
This report reflects the views of the author alone, not those of How we made it in Africa.
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