Independent Newspapers

Finance Minister Pravin Gordhan. Picture: Neil Baynes.

 To compete in the global economy, flexibility, innovation and leadership by both the government and the private sector were required, Finance Minister Pravin Gordhan said yesterday.

 Referring to the National Development Plan, driven by Minister for Planning in the Presidency Trevor Manuel, who is Gordhan’s predecessor, and the New Growth Path, driven by Economic Development Minister Ebrahim Patel, Gordhan acknowledged the inputs of these two programmes in what he dubbed the need to build a more “adaptable” economy.

In his 2012/13 Budget speech, Gordhan noted that the New Growth Path recognised that special employment initiatives had to be a priority in “our present national circumstances”, while in the longer term “growth in agriculture and manufacturing and investment in a knowledge-based economy must be prioritised”.

The draft National Development Plan identified several key objectives, including lowering costs for both households and business, increasing public infrastructure spending, growing South Africa’s agricultural and manufacturing sectors, raising mining output, improving the functioning of the labour market “particularly to help young people access work”, and raising competitiveness and exports.

But Gordhan emphasised that South Africa’s development strategy “requires a capable state and active citizens”. The country needed parents to work with the state to deliver quality education, community leaders that would help protect neighbourhoods, business leaders and trade unions to grow the economy, and investors who created jobs.

He made the point in isiZulu: “Uzoyithola kanjani uhleli ekhoneni”, which means: “How far will you get if you are sitting in your corner?”

Gordhan underpinned Patel’s jobs drive as the number one priority in the New Growth Path. Patel has argued that public investment could create 250 000 jobs a year in energy, transport, communications and water infrastructure and in housing through to 2015.

While Patel focused more on the state’s role in fast-tracking job creation, Gordhan said that the private sector should play a substantial role in several sectors. “Access to telecommunications services is financed by private operators and our airline industry has several private sector players,” he said.

“The first round of over 1 200 megawatts of renewable energy projects was recently successfully tendered to independent power producers.”

Private sector capacity could also be mobilised through construction and operating concessions, for example in the management of industrial development zones, freight logistics and ports operations, Gordhan said.

He appeared to emphasise Manuel’s contribution to the national debate on how to spur growth and development, referring to the National Planning Commission vision as having “built” on the New Growth Path adopted in 2010.

His director-general. Lungisa Fuzile, said in the Budget Review that the commission had identified the main challenges facing the economy as unemployment, income inequality, poor quality education, poorly located and insufficient infrastructure, the resource intensity of exports and skewed spatial patterns.

Fuzile said that the proposed interventions were aimed at expanding economic opportunity for all through investment in infrastructure, diversifying exports, strengthening links to faster-growing economies, enacting reforms to lower the cost of doing business, reducing constraints to growth in various sectors, and moving to more efficient and climate friendly production systems.

“Improving infrastructure and network services that support industries such as mining and agriculture as well as new dynamic industries will be the focus of a more labour-absorbing growth path.

“Regulatory reforms, improved competitiveness and an enabling investment climate will boost employment and growth prospects.”