{"id":422772,"date":"2020-08-04T17:04:26","date_gmt":"2020-08-04T15:04:26","guid":{"rendered":"https:\/\/businesstech.co.za\/news\/?p=422772"},"modified":"2020-08-04T17:04:26","modified_gmt":"2020-08-04T15:04:26","slug":"imf-urges-south-africa-to-make-reforms","status":"publish","type":"post","link":"https:\/\/businesstech.co.za\/news\/business\/422772\/imf-urges-south-africa-to-make-reforms\/","title":{"rendered":"IMF urges South Africa to make reforms"},"content":{"rendered":"

South Africa is likely to benefit more from implementing structural reforms to boost economic growth, revive business confidence and stabilise debt than fiscal consolidation, the International Monetary Fund said.<\/p>\n

“The payoff from growth is much more than the payoff from fiscal consolidation,\u201d said Montfort Mlachila, the Washington-based lender\u2019s senior resident representative in South Africa.<\/p>\n

“Fiscal consolidation is needed, but it is definitely not sufficient and too much fiscal consolidation undermines growth.”<\/p>\n

The government should take steps to boost productivity and growth in network industries especially in electricity, telecommunications and ports and railways, Mchalia said in a webinar organized by asset manager Ninety One.<\/p>\n

It should also improve the predictability of the regulatory framework in sectors such as mining, the general business climate and ease of doing business indicators, he said.<\/p>\n

South Africa\u2019s economy is facing its biggest economic contraction in nine decades because of a lockdown to curb the spread of Covid-19.<\/p>\n

Increased government spending, including a R500 billion ($28.8 billion) stimulus package, is set to weigh on an already strained the budget, with state debt projected to peak at close to 90% of gross domestic product by 2023-24.<\/p>\n

Reforms proposed in the National Development Plan, adopted by the cabinet in 2012, and a 2019 National Treasury policy paper that could lift economic growth by two to three percentage points and create more than 1 million jobs over a decade, have remained dormant.<\/p>\n

Even before the lockdown, Africa\u2019s most-industrialized economy was stuck in the longest downward cycle since World War II. It was in a recession for three quarters and business confidence was languishing near record lows.<\/p>\n

\"\"<\/a><\/p>\n

The lender last month approved a $4.3-billion facility for South Africa to assist in fighting the virus.<\/p>\n

The money came days after President Cyril Ramaphosa said the government would crackdown on corruption linked to its virus response and ordered a probe into the misuse of public funds.<\/p>\n

While the emergency loan comes without the structural adjustment conditions typical of other IMF programs, the government committed to transparency and good governance in a letter of intent, in which it asked for support.<\/p>\n

The lender expects the government to provide it with periodic information on the roll-out of its interventions, a quarterly report on virus spending and an ex-post audit by the country\u2019s auditor-general, he said.<\/p>\n

\n

Read: Foreign investors lose interest in South African bonds<\/a><\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"

South Africa is likely to benefit more from implementing structural reforms to boost economic growth, revive business confidence and stabilise debt than fiscal consolidation, the International Monetary Fund said.<\/p>\n","protected":false},"author":59,"featured_media":405689,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9872],"tags":[26],"class_list":["post-422772","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-headline"],"_links":{"self":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/422772","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/users\/59"}],"replies":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/comments?post=422772"}],"version-history":[{"count":2,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/422772\/revisions"}],"predecessor-version":[{"id":422778,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/posts\/422772\/revisions\/422778"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media\/405689"}],"wp:attachment":[{"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/media?parent=422772"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/categories?post=422772"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/businesstech.co.za\/news\/wp-json\/wp\/v2\/tags?post=422772"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}