HILARY JOFFE: SA must confront its demons if it is to achieve long-term growth

30 May 2021 - 05:05 By HILARY JOFFE:

Economists and ratings agencies are revising growth forecasts for this year and next upwards as the economy basks in a commodity price boom and bounces back from last year's Covid crash. But no-one sees it lasting: the economy might grow at more than 4% this year (a level last seen before the global financial crisis), but over the next few years it's forecast to revert to its pre-Covid stagnation.

The government's economic reconstruction and recovery plan unveiled in October last year was meant to turn around that trajectory and put SA on the path to sustained longer-term growth. It identified four "priority interventions" which have been getting lots of airtime and sound plausible as quick-fix growth strategies. The trouble is that two of the four - infrastructure and localisation - are by no means guaranteed to ensure a sustainable lift in SA's economic growth rate. Poorly handled, they could even have the opposite result...

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