Report spells out how to reignite SA’s growth

A new report released today by the McKinsey Global Institute and the global management consultancy’s Johannesburg office, sets out a series of tangible measures - deliverable in the short to medium term – which could provide the means to reignite South Africa’s growth, adding over one trillion rand to annual GDP by 2030.

This, according to the report, would provide opportunities to transform the wider South African society and create over 3.4 million jobs in the process.
The report lists the ‘big 5’ as:
1.    creating a globally competitive hub in advanced manufacturing;
2.    making infrastructure investment more productive to enable growth across the economy;
3.    harnessing natural gas for power generation and industrial development;
4.    boosting exports of services to the rest of Africa and the world, and;
5.    unlocking South Africa’s full agricultural production and processing potential.

McKinsey believes these ‘big 5’ will contribute both to GDP growth and job creation, and their successful implementation will benefit many other sectors of the South African economy. But all of them depend on two critical enablers - building South Africa’s skilled labour force through a dramatic expansion of vocational training, and forging a true development partnership between government and business, according to the report.

“South Africa has made extraordinary progress in so many ways over the last 20 years, with a doubling of GDP, millions lifted from poverty and a fast-growing middle class,” said McKinsey partner Christine Wu. “But a growing sense of pessimism pervades and the slowing of progress – our sluggish GDP growth since 2008 compared to the rest of the African continent, high unemployment and particularly high youth unemployment – has led to a general sense that South Africa is stuck in a low growth trap and its best days are behind us. But we argue in this new report that a focus on five areas could bring about a transformation.”