Key interventions did not shift economy - ANC
Cape Town - A key constraint preventing the ANC from achieving the industrial growth it aims for is the national electricity shortage, according to a discussion document issued by the party ahead of its National General Council (NGC) taking place in October.
The document states that, despite a number of interventions by government, growth in SA remains too low and job creation insufficient. External demand also remains low, as growth in many of South Africa’s overseas trading partners remains weak, retarding investment.
Key interventions adopted by government in an attempt to stimulate inclusive growth and investment in the domestic economy were counter-cyclical fiscal policy, public infrastructure investment, industrial and trade policy measures and the acceleration of the Broad Based Black Economic Empowerment Act to transform ownership patterns.
"While these interventions have prevented job losses, they have not shifted the economy onto a new sustained inclusive growth path," according to the document.
The counter-cyclical fiscal policy was aimed at maintaining aggregate demand through continuing planned levels of government expenditure despite a slowdown in tax revenues.
"Rising government debt and a wide current account deficit make South Africa vulnerable to global economic shocks," states the document.
The ANC sees infrastructure as an essential pre-requisite for increased investment and employment, but says in the document that such infrastructure comes at a cost.
In addition to putting pressure on the fiscus, the document explains that it is also putting upward pressure on the cost of living and the cost of doing business, an effect that is particularly amplified in a low-growth environment.
As for industrial and trade policy measures aimed at stimulating investment in industrial activity and promoting South African exports, the document states that in many cases, the Industrial Policy Action Plan (Ipap) has not gained traction across the relevant implementing agencies or departments.
Regarding the Broad Based Black Economic Empowerment Act, the document says a recent review will close a number of loopholes and deal with firms who engage in "fronting".
The ANC expects this to better align its B-BBEE imperatives with the need to promote industrialisation of the SA economy.
"To facilitate a more meaningful participation of black people in the mainstream economy government is now looking at various ways of developing and sustaining black industrialists, including a targeted incentive to support black entrepreneurs entering the industrial sector," said the document.