CAPE TOWN – The Institute of Race Relations (IRR) has said the stimulus package announced by the government on Friday did not address the deeper reasons for South Africa’s economic malaise and will fail in positioning the country as a competitive emerging market.
The IRR has shown that emerging markets are set to achieve rates of economic growth of just less than 5 percent this year and more than 5 percent next year. By comparison, South Africa will grow at a tenth of those rates this year, while the government is forecasting gross domestic product (GDP) growth rates of less than 2 percent of GDP next year.
Reacting to President Cyril Ramaphosa’s announcement, IRR chief executive Dr Frans Cronje said: “The success or otherwise of any policy framework or stimulus package must be the extent to which it will allow South Africa to compete in time with rates of growth similar to those of comparable emerging markets – any lesser standard sells South Africa short.
“What was announced today is vacuous in the sense that it fails to address the deeper policy underpinnings of South Africa’s sluggish economic growth. There was nothing fundamental on labour market reform, nothing sound on empowerment policy reform, no moves of any significance on education policy, and far from adequate assurances on property rights.”
Broader policy environment