South Africa\u2019s sixth blueprint in 25 years to boost economic growth and job creation may succeed where the previous ones have failed – by being less ambitious.<\/p>\n
Most of the reforms proposed in the National Treasury\u2019s new policy paper are in line with President Cyril Ramaphosa\u2019s election manifesto and the National Development Plan, an economic plan that he co-authored and that was adopted by parliament in 2012.<\/p>\n
If implemented, steps such as selling Eskom Holdings SOC Ltd\u2019s coal-fired power plants, easing visa rules and releasing broadband spectrum could boost the average growth rate by 2.3 percentage points and create more than a million jobs over a decade, the Treasury said.<\/p>\n
That\u2019s less ambitious than the National Development Plan\u2019s average annual growth target of 5.4% and intention to create 1 million public-sector jobs in three years.<\/p>\n
\u201cThe estimated growth impact seems realistic, particularly insofar as it clearly demonstrates that the benefits of the proposed reforms will likely take time to materialize,\u201d said Elna Moolman, an economist at Standard Bank Group Ltd. The plan is generally pragmatic and implementable, she said.<\/p>\n
Since the African National Congress won the first all-race elections in 1994, the country has had the Reconstruction and Development Plan, the Growth Employment and Redistribution plan, the Accelerated and Shared Growth Initiative for South Africa, the New Growth Path and the National Development Plan.<\/p>\n
\u201cThe real challenge is whether or not it will be bought by the ANC in its totality or whether it will meet the same kind of indifference and opposition, for that matter, that was encountered with regard to the NDP,\u201d said Azar Jammine, chief economist at Econometrix.<\/p>\n
\u201cMany of the suggestions are market-oriented and that is opposed by the socialist elements\u201d within the ruling alliance, he said.<\/p>\n
The blueprint comes as monthly data suggest Africa\u2019s most-industrialized economy averted a second recession in as many years. Still, growth for the year is projected as low as 0.2% by the Bureau for Economic Research, complicating a drive to bring down a 29% jobless rate and rein in public debt and the budget deficit.<\/p>\n
Most of the ideas in the policy paper are not new, Treasury Director-General Dondo Mogajane told reporters on Wednesday.<\/p>\n
\u201cThis shows that if we get certain things out of the way, we will have economic growth,\u201d he said in Cape Town. \u201cWe cannot borrow more, that is unfortunate, but the reality is that if we don\u2019t grow the economy, tax revenues will fall and we may not be able to fund all government expenditure and so the solution is growing the economy.\u201d<\/p>\n