Government is working hard to build an economy that is able to generate jobs, while improving export competitiveness. Deputy President Cyril Ramaphosa speaking at the Reserve Bank Leadership Conference.

Ramaphosa says, “We aim to radically transform the South African economy through seeking a qualitatively different economy whilst taking gigantic steps to transform the economy.”

“The key challenges to economic growth in South Africa are domestic.”

“The economy barely grew in the second quarter, as mining and manufacturing production fell sharply and growth in other sectors remained modest”

Among the things that impacted the economy negatively were concerns around the reliability of electricity supply, strikes and poor service delivery. These were exacerbated by issues like low skills levels and widespread poverty.
The Medium Term Strategic Framework, which was recently unveiled by government, is aimed at tackling such issues. It is guided by the National Development Plan (NDP), with key priorities on economic policy including driving growth in the main productive sectors of the economy and the elimination of unnecessary regulatory burden.

Adding, “The central bank has a critical role to play in supporting the NDP.”

Government seeks an economy that grows at no less than 5% a year. With this target in mind, the Deputy President said economic transformation and inclusive growth will not result from a single intervention but from a range of mutually supporting initiatives. Government will continue to pursue a counter-cyclical fiscal policy where it saves during good times and spends to stabilise the economy during downturns.

“Government sees a greater role for development finance institutions in supporting investment in agriculture, infrastructure, small business development, black economic empowerment and industrialisation.”

“Banks will be encouraged to broaden access to financial services to enable people to build up their assets and to help small businesses to emerge and grow.”

Reserve Bank

While supporting the NDP, the Reserve Bank is a partner in making sure that the NDP is realised.

Adds Ramaphosa, “A capable Reserve Bank is a crucial part of a capable state.”

“The bank’s independence to execute monetary policy without fear and favour or regard for political cycles is a critical aspect of the country’s policy architecture.”

Adding, “Independence does not mean that the bank is not accessible or accountable as the central bank is accountable to the people of the country and reports to Parliament.”

Concluding, “The regulation of our financial sector is in good hands.”

Source – SAnews.gov.za