NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Tuesday, July 31, 2012

By focusing on key sectors, government believes it can reduce unemployment from 25% to 15% by 2020. The priority sectors are infrastructure development, agriculture, mining, manufacturing, the “green” economy, and tourism — as identified in the November 2010 New Growth Path.

This “shared vision” for domestic economic development was expanded in the November 2011 National Development Plan: Vision for 2030. The document was produced by the National Planning Commission established to inform and advise government on issues affecting the country’s long-term development goals.

Headed by minister in the presidency Trevor Manuel and businessman Cyril Ramaphosa, the commission produced a roadmap that it says will eliminate poverty and reduce inequality in SA by 2030. Poverty alleviation will be achieved by breaching the R418/person per month poverty line (in 2009 prices). Addressing inequality requires a decline in the SA Gini co-efficient (a measure of income inequality) from 0,7 to 0,6 points – zero signifies perfect equality while one indicates total inequality.

The commission identifies nine structural inhibitors to addressing its “twin” poverty and inequality alleviation goals. Key among these is poorly located and undermaintained infrastructure, followed by unemployment and low levels of education. It says SA needs a higher level of capital spending by both the private and public sectors to meet growth objectives.

SA needs to build, maintain and expand its strategic infrastructure to encourage and accommodate economic growth. But it needs a champion to drive its infrastructure programmes and create an enabling environment for economic growth.