Future economists share their views on SA's economic growth prospects

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Future economists share their views on the prospects for economic growth in South Africa. Photo: iStock
Future economists share their views on the prospects for economic growth in South Africa. Photo: iStock


Future economists believe that, compared with other countries, South Africa has better-developed infrastructure, including roads, educational institutions and healthcare facilities. However, they said critical economic infrastructure investments, such as energy, have lagged behind domestic demand.

The future economists are among 20 finalists who secured a top spot in the 51st Nedbank and Old Mutual Budget Speech annual competition. The competition poses challenging economic scenarios to undergraduate and postgraduate economics students from tertiary institutions across the country. In this year’s competition, Wits University is dominating the list, with eight spots.

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The undergraduate essay topic asked students to share their views on South Africa's economic growth prospects over the medium term and to evaluate and discuss the most pertinent factors influencing growth prospects. They also had to discuss how these factors affected South Africa’s growth between 2004 to 2007 and from 2015 to 2019.

Meanwhile, the postgraduate students’ essay topic was to evaluate the impact of public infrastructure investment on economic growth, based on South Africa’s post-2000 experience, and they were also asked to discuss this impact on the prospects for economic growth in the medium term.

Walter Musosa, a postgraduate student studying public finance and financial management, said government should revise its public infrastructure investment policy reforms to enable public-private partnerships to fund public infrastructure projects and take the budgetary pressure off government.

Government should issue long-term bonds, as Brazil has done, to attract funding from foreign investors and the international bank. Because corruption is the principal barrier preventing the advancement of the infrastructure contribution to other growing countries, government should reduce corruption to zero tolerance.

Meanwhile, Delisa Simelane, an undergraduate at the University of Johannesburg, who said her favourite subject was quantitative economics and econometrics, believed that the employment rate was a major determinant of economic growth.

“The global pandemic triggered one of the most horrendous jobs crises since the Great Depression, and studies have shown that its effects will linger well over the medium term. While the acceptable inflationary bracket is 3% to 6%, there is a negative relationship between inflation and economic growth. The ongoing war by Russia on Ukraine has perpetuated global cost-push inflation, and this hyperglobal inflation will contribute to negative growth in South Africa over the medium term.”

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Simelane added that government should dedicate a majority of the national budget to job creation to curb the effects of unemployment, and invest in industrial and technological growth and development, which would further reduce unemployment, and increase the GDP and embark on expansionary monetary and fiscal policies to raise aggregate demand and bring the balance of payment to a surplus.

For the final round of the competition, the 20 finalists will be interviewed by the adjudication panel during the 2023 Budget Week in Cape Town. Thereafter, the winners of the 51st Nedbank and Old Mutual Budget Speech Competition will be announced by the minister of finance at a gala dinner on the evening of the budget speech on February 22.

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