20 August 2010
Although South Africa is well into a modest economic recovery, the country must work to create an environment that is favourable to domestic and foreign investment, says Finance Minister Pravin Gordhan – the ultimate goal being inclusive, hence sustainable, economic growth.
“The South African economy is well into modest recovery,” Gordhan said at the launch of the Land Bank’s annual report in Pretoria this week. “Economic growth came in at 4.6% during the first quarter of this year, and growth for the second quarter is expected to be at least three percent.”
Inclusive economic growth
What is crucial in South Africa, he said, is inclusive economic growth – growth that creates jobs, reduces poverty and creates opportunities, especially for young people. Such growth also generates taxes to pay for public services like education.
“It is therefore important that we remain focused on getting South Africa’s economy on a higher and much more sustainable growth trajectory. If we are to grow faster, we must create an environment that is favourable to domestic and foreign investment.”
Cost of doing business
The cost of doing business in South Africa must be lowered, red tape must be cut, while quality public services must be rendered to the public, Gordhan said.
“We must increase competition between firms, a serious challenge in South Africa; lower barriers to entry in the economy; support innovation; and, above all, increase exports.”
If South Africans were intent on a prosperous and sustainable future, then the country should set its sights for growth of seven percent a year over the next 20-30 years, he said.
“All we’ve achieved is about five percent. How to grow this economy at seven percent over the next 20 to 30 years is a crucial challenge all of us face for the next year or so.
“We must also develop new ways of thinking about economic growth, and the role of the agricultural sector in economic growth, and the willingness to do things differently,” Gordhan said.