South Africa Reacts to Faltering Growth Momentum

SOUTH AFRICA - In Brief 24 Jul 2013 by Iraj Abedian

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An African National Congress (ANC) National Executive Committee (NEC) meeting resolved this week to set up a Presidential Task Team on the economy, with a view to arrest the faltering growth momentum. The South African economy has been bedeviled by the weak global economic environment as well as domestic structural bottlenecks that have contributed to a declining growth rate and worsening economic prospects. Following a growth of 2.5 per cent in 2012, the South African economy is forecast to grow by 2.0 per cent in 2013. Given this backdrop, the ruling ANC has come to the realization that the time has come for acting to address domestic constraints to job creation and poverty reduction. No doubt, the forthcoming national elections of May 2014 must have loomed large in this regard. However, the move to appoint an economic task team has been greeted with mixed reactions within the country. Critics consider the move to be futile as the SA already boasts of a National Planning Commission as well as a National Development Plan – a road-map towards addressing the issues of unemployment, poverty and inequality. However, addressing the deep structural impediments that South Africa faces requires a concerted and transparent approach. In this regard, we are of the view that the proposition of the ANC’s NEC to appoint a task team is a step in the right direction, especially if the composition of this task team is based on competence and professional independence.   Given the political economy conditions, the SA government urgently needs to address the issue of effectiveness in implementing and monitoring major socioeconomic programs in infrastructure and rural development, energy...