Steps will be taken to boost the government’s ability to execute growth and development strategies, Trade and Industry Minister Mandisi Mpahlwa said on Monday.
”We need to focus on the ability to implement,” he told reporters in Pretoria.
The state needed to improve its ability to effect strategies in an efficient, effective and co-ordinated manner.
Briefing journalists on progress with the government’s plan of action, the minister said the economy was in its highest growth rate in 11 years and had broken through the previous three percent ”ceiling”.
Mpahlwa was talking on behalf of the government’s economic, investment and employment cluster of ministries.
Despite a global economic slowdown and high oil prices, South Africa’s interest and inflation rates are spiralling downwards, and business and consumer confidence was high.
The economy is resilient and ”steaming ahead”, the minister said.
The government is therefore taking steps, including the development of a micro-economic reform strategy, to reinforce the positive trend and build on gains made.
All efforts are focused on raising investment levels, employment creation, boosting exports, and increasing productivity.
Mpahlwa said state-owned enterprises (SOEs) will play a critical role in accelerating growth by increased investment.
Examples included the revamping of power stations by Eskom and the acquisition of new locomotives by Spoornet.
”A priority is the implementation of an appropriate regulatory framework to stimulate new SOE investment in infrastructure,” the minister said.
”In particular, there is a need to improve regulations and regulatory capacity in electricity, transport and communications with a view to facilitating, among other things, developmental pricing policies that promote increased investment and economic activity.”
On investment in the first economy, Mpahlwa said this will be enhanced by improvements in competitiveness in areas like electricity and transport.
Reducing cost structures and increasing competition are high priorities for boosting growth.
”[The] government intends sending a strong message to all sectors and firms in the economy that there must be increased competition to promote the growth of downstream and value-adding economic activity,” the minister said.
”In particular, [the] government is focused on lowering the costs of key resource-based inputs and telecommunication prices.”
Interventions included strengthening competition regulatory frameworks and the possible fast-tracking of measures to eliminate import parity pricing in some sectors.
Mpahlwa said the government will focus on developing the potential of priority economic sectors, and was to this end developing strategies for the chemicals, tourism, textiles, clothing and footwear sectors.
On enhancing international economic relations, he emphasised the importance of eliminating trade-distorting barriers — an issue up for discussion at a World Trade Organisation ministerial meeting in Hong Kong in December.
Developing countries wanted to see that meeting come up with specific timelines for the phasing out of subsidies, Mpahlwa said.
He also stressed the importance of boosting intra-African trade.
Turning to economic inclusion, the minister said the promotion of small and micro businesses is critical.
An integrated small business strategy will be tabled before the Cabinet next month, which he said adopted a ”reshaped view” based on the sector’s experiences over the past ten years.
A new code of good practice on black economic empowerment was also due to go before the Cabinet next month.
The minister underlined the importance of research and development spending in boosting economic growth, saying South Africa was well on its way to reach the target of one percent spending on research and development of gross domestic product by 2008.
”Overall, we are happy that much progress has been made on implementing the government’s programme of action,” Mpahlwa said.
”We will continue to do this work.” – Sapa