Structural reform the only solution

The high cost of logistics and
labour has been named as
the major obstacle to South
Africa’s gross domestic
product (GDP) growth.
“We need growth of a
minimum of 5% to grow jobs
and prevent the projected
27% unemployment rate for
next year,” said Nedbank
economist, Busisiwe Radebe.
She pointed out that
structural
reform –
something
for which
the global
credit ratings
agencies
were calling
– was the
only way for
the country
to avoid a
potential
downgrade
to junk
status and to
grow the economy.
“We have the plan –
the nine-point National
Development Plan –
which provides a sound,
sustainable way towards
that structural reform.
The problem is, we’re not
implementing it,” said
Radebe.
“We all know we need
to bake a bigger pie but we
are sick of hearing about
that. We need action now.
We need to know how and
when.”
She believes structural
reform is urgently needed
in two areas – education
and labour. “If we have the
knowledge resources and the
proper skills force, we could
build a strong economy,” said
Radebe.
“It's time we took a
hard look at
education –
starting from
primary to
secondary
education.
It's clear that
standards
are not
maintained
throughout
South africa's
schools."
She added
that while
labour costs
per se were not higher
than in most emerging
economies, a different
picture emerged when
compared to production
output. “We have very low
productivity levels in SA
– due to sporadic labour
unrest and partly due to
a lack of the proper skills
– which in turn make our
labour costs uncompetitive,”
she said.
INSERT & CAPTION
If we have the
knowledge resources
and the proper skills
force, we could build
a strong economy.
– Busisiwe Radebe