South Africa could drastically boost economic growth if it fixes its ailing energy and logistics sectors and reduces crime, a top International Monetary Fund official said.<\/p>\n\n\n\n
With its abundant natural endowments and strong institutions, South Africa \u201cis poised for a growth take-off if reforms that resolutely and courageously tackle structural obstacles are implemented,\u201d Gita Gopinath, the fund\u2019s first deputy managing director, told the South African Reserve Bank\u2019s Biennial Conference in Cape Town on Friday.<\/p>\n\n\n\n
Addressing crime, education, electricity shortages and logistic constraints \u201care clear areas where if there is improvement you could see a substantial effect on growth,\u201d she said.<\/p>\n\n\n\n
South Africa\u2019s gross domestic product grew 1.9% last year and is set to expand just 0.3% in 2023, IMF estimates show, with power utility Eskom Holdings SOC Ltd.\u2019s inability to meet demand and port and rail bottlenecks limiting output.<\/p>\n\n\n\n
Steps to improve the power supply \u2013 including relaxing restrictions on private power generation \u2013 could see the growth rate improve to 1.7% next year, IMF forecasts show.<\/p>\n\n\n\n
Gopinath also urged South Africa to improve the performance of state-owned companies in critical sectors and allow for private sector participation, which would save it money and enhance the provision of the public services at a time when the government has limited fiscal space.<\/p>\n\n\n\n
The nation\u2019s interest bill is forecast to increase from about 19% of revenue this fiscal year to 27% by 2028-29 \u2014 about twice this year\u2019s budget allocation for health, she said.<\/p>\n\n\n\n
\u201cAs in other emerging markets, success in South Africa will require difficult reforms now that may not pay off until later, she said.<\/p>\n\n\n\n
\u201cBut it is an investment well worth making\u2014and one that the IMF stands ready to support.\u201d<\/p>\n\n\n\n