ROGER BAXTER: After the 2017 changes SA has been stabilised, but now we need growth
Let’s stop being ideological on economic policy and focus on being pragmatic
SA is in its most serious economic crisis since the mid-1980s. The initial 14-year period of fiscal stabilisation and positive growth of the democratic era came to a grinding halt as the era of state capture took hold, and pushed us to the abyss and over. The change of government from 2017 has helped stabilise the situation, but the country’s potential growth rate at 1%-2% (because we have no productivity growth — due to shortages of electricity, rail, ports — and low investment rates) remains too low.
There are five sets of critical structural and institutional reforms essential to SA’s economic recovery, involving raising the growth rate above 3% a year. First, we have to stabilise the country’s government finances through fiscal reform, to avoid a full-blown sovereign debt crisis and systemic banking crisis...
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