Finance Minister Tito Mboweni has today convened a colloquium looking at interventions to grow the South African economy.
The colloquium – being held at the South African Reserve Bank (SARB) Conference Centre on Friday — sees academics, government officials, private sector experts and other strategic stakeholders coming together to hold discussions with an emphasis on interventions that encourage new models and paradigm shifts in support of faster economic growth.
Speaking at the colloquium, Mboweni said several questions have been asked in Cabinet meetings on the state of the South African economy.
“In conversations inside Cabinet, the question has arisen as to whether we are pursuing the correct growth path for South Africa, whether we are having the correct conversations. Some Cabinet colleagues have said [that] we are maybe not thinking outside the box,” said the Minister.
While the colloquium may not be able to come up with solutions for every challenge, it is being held in pursuit of conversations held in Cabinet so as to come up with ideas to help the economy grow.
The colloquium, which is also being attended by Economic Development Minister Ebrahim Patel, Reserve Bank Governor Lesetja Kganyago as well Harvard Professor Ricardo Hausmann, will discuss several academic papers that have been prepared.
These papers, Mboweni said, form an important part of the conversation at a time when the economy is not growing at rates “we would have loved to see”.
“That has a number of implications all round for us. The significant implication is poor revenue collection and poor revenue collection leads to a number of things, in particular the fact that we’re not able to allocate resources for the much desired needs of the country,” he said.
The Minister said it is concerning that more and more South Africans are becoming more marginalised from economic activity.
“That is an issue of concern,” he stressed, adding that the country’s population is growing and placing increased demand on the fiscus.
Earlier this month, Statistics South Africa (Stats SA) announced that South Africa exited a technical recession, with the economy growing by 2.2% in the third quarter of 2018.
Meanwhile, Hausmann, who visited South Africa for the first time in 2004, said he had built up good relations with academics from South African universities like the University of Cape Town.
He said South Africa’s growth over the last five years has not been “spectacular”, with the country facing hard challenges it has to address.
“There are really hard issues. In economic policy, there is no best practice. There is no such thing as a perfect suit, there’s only a perfectly tailored suit and tailoring is where the art is. This is a very unique country with a unique set of challenges. Understanding them and bringing them into the design of policy is important,” he said.
Mboweni said following today’s colloquium, a smaller working group will reconvene in January in preparation for the Cabinet strategic planning meeting at the end of January 2019.
“I’m quite certain we would not have completed the work by then, we keep the conversation until about midyear to have real substantive proposals before us,” he said.
Representatives of the Organisation for Economic Co-operation and Development (OECD) and the World Bank are also attending Friday’s session.