The board of Business Leadership South Africa has thrown its weight behind National Treasury's new economic policy paper, saying it crystalises the way forward for an economy "on the edge of a precipice”.
The organisation, which represents big business in SA, said it was encouraged by the clear direction given by Finance Minister Tito Mboweni in the 77-page economic strategy paper, which outlines a series interventions and reforms aimed at stimulating SA's sluggish economy.
“South Africa is on the edge of a precipice and the problem has been the lack of clarity and decisiveness on some the key issues articulated in this paper,” said BLSA.
The document, released on Tuesday with a call for public comment, has been met by mixed reactions. While trade union federation Cosatu slammed it as “incoherent, confused and unreliable”, its alliance partner the ANC said it was necessary to consider a plan taking another look at South Africa's economy.
BLSA said the documented rightly identifies “the causal factors and steps to be taken to address them” including unemployment and low investor confidence. In July SA's unemployment rate increased by 1.4 percentage points to 29% - the highest rate in nearly 15 years. In the first quarter of 2019, meanwhile, the economy contracted by 3.2%, the largest quarter-on-quarter drop in a decade. Stats SA is set to announce SA's GDP growth figures for the second quarter on next week.
BLSA said "the business of government is to make tough economic choices ... to benefit the rest of the country, and this paper is a step in that direction."
According to Treasury, SA's current economic path is unsustainable, with the country facing the triple threat of stagnating economic growth, rising unemployment and high inequality.