29 August 2014
The recently released framework for implementing the National Development Plan (NDP) will help tackle domestic obstacles to growth in South Africa, drive growth in productive sectors of the economy, and cut down on red tape hampering investment, says Deputy President Cyril Ramaphosa.
Addressing a Reserve Bank leadership conference in Muldersdrift, west of Johannesburg on Thursday, Ramaphosa said the key challenges to economic growth in South Africa were domestic.
“The economy barely grew in the second quarter, as mining and manufacturing production fell sharply and growth in other sectors remained modest,” he said, noting that concerns around the reliability of the country’s electricity supply, strikes and poor service delivery had been exacerbated by low skills levels and widespread poverty.
The Medium Term Strategic Framework (MTSF), unveiled earlier this month by Minister in the Presidency for Planning, Monitoring and Evaluation Jeff Radebe, was aimed at tackling such issues, Ramaphosa said.
The MTSF will serve as comprehensive framework for implementing the NDP over the next five years, focusing the state’s efforts on a set of manageable programmes while guiding the allocation of resources across all spheres of government.
The NDP aims for an economy that grows at no less than 5% a year. With this target in mind, Ramaphosa said, economic transformation and inclusive growth would not result from a single intervention but from a range of mutually supporting initiatives.
“We aim to radically transform the South African economy. We seek a qualitatively different economy.”
South Africa would continue to pursue a counter-cyclical fiscal policy, saving during good times and spending to stabilise the economy during downturns, he said.
At the same time, the government saw a greater role for development finance institutions in supporting investment in agriculture, infrastructure, small business development, black economic empowerment and industrialisation.
“Banks will be encouraged to broaden access to financial services to enable people to build up their assets and to help small businesses to emerge and grow,” Ramaphosa said, adding that measures to address poor lending practices and excessive charges would be introduced.
The government would continue to strengthen the regulation of the country’s financial institutions in order to ensure that savings were protected and customers treated fairly. It also expected Postbank to play an expanded role in banking services.
The Deputy President said the country’s central bank had a critical role to play in supporting the NDP, adding: “A capable Reserve Bank is a crucial part of a capable state.”
The central bank’s independence, enabling it to execute monetary policy without fear and favour or regard for political cycles, was a critical aspect of South Africa’s policy architecture, he said.
However, independence did not mean that the bank was not accessible or accountable to the people of the country, hence its duty to report to Parliament.
The Deputy President paid tribute to the bank and to Governor Gill Marcus, who was present at the conference, for the way in which the bank is run, and for the manner in which the situation at African Bank was recently managed.
The regulation of our financial sector is in good hands,” he said.
SAnews.gov.za and SAinfo reporter