Johannesburg - Unemployment and inequality are the biggest problems facing the South African economy, the Organisation for Economic Co-operation and Development (OECD) said on Monday.

“Capital income is rising in South Africa, access to public services is improving, social conditions are strengthening and crime rates are falling,” OECD secretary-general Angel Gurrie said.

“But unemployment remains stubbornly high and the distribution of income continues to be very skewed.”

Gurrie said at a Midrand news briefing, also attended by Finance Minister Pravin Gordhan, that the problems South Africa faced were prevalent in other developing nations.

“Real income growth has been sluggish compared to most other middle-income countries. As your National Development Plan identifies it, there is a burning need for faster progress, more action and better implementation.”

Gurrie was presenting a report on an OECD study into South Africa’s economic growth since the dawn of democracy. It had conducted two similar studies in the past.

The latest study identified weaknesses in the labour market and weak competition in the product market as some of the problems affecting growth.

“One of the main messages of the survey, echoing previous ones, is that reforms should allow labour market outsiders, those without a job, to be taken into consideration when deciding on wages and work conditions,” Gurrie said. - Sapa