11 May 2007
The South African government has set out 10 economic priorities to meet the Accelerated and Shared Growth Initiative of South Africa’s (Asgi-SA) target to reduce unemployment and poverty by 2014.
Trade and Industry Minister Mandisi Mpahlwa said on Thursday that the economic priorities, identified by the Cabinet in January, are to fork the bedrock of the programme of action of the government’s economic cluster over the next three years.
“Achieving the 10 priorities will make an important contribution to transforming the structure of the South African economy to promote employment, growth and halve poverty in line with the Asgi-SA’s objectives,” the minister said.
Speaking to reporters in Pretoria on progress made by the cluster, Mpahlwa said that strengthening the capacity of economic regulators in key industries was a major priority.
Enhancing economic efficiency through strengthening competition policy is another major priority, with Mpahlwa adding that this may be done through amendments to competition legislation or through the drafting of regulations to refine and optimise this policy.
Boosting information and communications technology is another major area of focus.
However, the need to increase the access to and uptake of information communication technology (ICT) in South Africa and lower telecoms prices would not necessarily follow the model of the “developmental pricing” on electricity offered to investors in large projects, like the proposed aluminium smelter at the Coega Industrial Development Zone, outside Port Elizabeth.
Rather, the ICT sector would be supported by possibly another fibre-optic cable on top of the Eassy (Eastern African Submarine System) cable being laid down the east coast of Africa, as part of a key Nepad (New Partnership for Africa’s Development) initiative, he said.
Along with the possibility of another cable is the increased rollout of wireless connectivity in localised zones by state-owned company Sentech, as well as the long-distance cables from state-owned broadband operator Infraco, which is a project of the Department of Public Enterprises.
Combined, these initiatives are expected to dramatically lower broadband costs as South Africa moves to boost the number of jobs provided through business process outsourcing, which is a key element of the Asgi-SA.
Another priority is the phased rollout of overhauled public transport infrastructure, which is still suffering from the legacy of apartheid urban planning that kept people far from places of work, the effect of which is now increased labour costs.
A key element of this intervention in public transport rollout – toward integrated, one-ticket, mass-transit transport – is being considerably boosted by the pending 2010 Fifa World Cup, which will see the nine host cities taking most of the attention from this strategy.
Then there is the “co-ordinated national human resources development strategy” which will involve increased skills development and training with a focus on Asgi-SA’s priorities.
In addition there is a massive infrastructure investment by government under way, which is seeing over R415-billion poured into the economy mostly through Eskom build programmes and investment by state-owned transport giant Transnet into railways, ports and freight logistics, among others.
Due to the extent of this investment, government has identified a need for increased monitoring of the implementation and impact of this infrastructure rollout, Mpahlwa said.
All of the above measured are being specifically tailored to increase economic efficiency, while another set of priorities have been designed to boost dynamic growth sectors of the economy.
These include an industrial policy framework that will focus on key sectors to leverage public spending, along with “supportive macro-economic management”, much of which will involve measures to attempt to stabilise South Africa’s volatile rand at a stable and competitive level.
Priorities to support and integrate small, medium and micro-sized enterprises is another key area, where measures will include government using its considerable spending power to allow these small businesses to benefit from state procurement, a practice already under way.
The marketing of co-operatives, stronger support for small business development and increased provision of access to finance are other measures the minister mentioned.
Already, the South African Micro-finance Apex Fund has handed out R69-million in loans, which Mpahlwa said is quite considerable given that these small businesses were looking at loans in the region of R10 000.
The final priority in the list of ten is the reduction of the regulatory burden on small businesses, including those imposed by by-laws.
The minister pointed to the need for far stronger communication of the opportunities available from “second economy” interventions – “an area where work has not advanced as much” as government had hoped.
These communication initiatives would involve the use of workshops, radio, and a planned television series demonstrating the extent of economic opportunities as well as the current Vuk’uzenzele programme.