South Africa needs to sharpen up its industrialisation programme if it is serious about reaching the 5.4% a year gross domestic product growth target as set out in the National Development Plan, as the country can no longer depend on its declining mining sector to drive economic growth.
Speaking at the Vision2030 summit, Department of Trade and Industry chief economist Stephen Hanival said the benefits the country experienced from the mining boom cycle from 2006 to 2008 had run dry and, paired with volatile commodity prices; it was time to focus on other areas of growth.
He said the biggest potential for growth was in labour-intensive sectors. “We need to look at building the manufacturing and agricultural sectors, as that is where the most jobs are.”
Hanival highlighted that there were a number of things that “need fixing in the South African economy”, before it could flourish – red tape and regulation efficiencies.
Many companies were repelled by the slow turnaround times, as they were willing to invest but not willing to wait. Regulation that serves no useful economic purpose is something that we need to remove,” Hanival said.
“Companies are not going to invest in South Africa because they like South Africans; they are investing here because they will make money here.”
“Economic transformation means focusing on new opportunities and investments towards the marginalised, to foster a new epoch and economic class, driving the acceleration of a new middle class,” he said.
