South African President Thabo Mbeki will focus on setting the course for a 6% growth rate in his State of the Nation address at the opening of Parliament on Friday, says the trade union movement Solidarity.
Its economist Lullu Krugel said in a statement on Wednesday that it would “give a useful indication of proposed policy directions to set the South African economy more firmly on course for a 6% growth rate”.
“He will undoubtedly attempt to answer criticism of service-delivery levels in government departments,” said Krugel.
Krugel said service delivery has been on the agenda for some time, and it was also addressed last year.
“Following a few years of good economic growth, the government will be keen to show that service delivery is still high on its list of priorities, together with the main focal points aimed at increased growth.”
Krugel expressed hope that job creation would be near the top of the agenda as one of the future growth accelerators.
“Growth is generally regarded as the way to create jobs in the economy, but one should not forget that job creation also has the ability to put the economy on a higher growth path.”
Even though the last labour-market survey showed that 685 000 new jobs were created between September 2004 and September 2005, unemployment has not shown any sign of declining. The economy is heading “in the right direction, but a few factors that should accelerate its progress are, in fact, retarding it”.
Examples are state departments that underspend or spend money ineffectively.
“No matter how much money government pumps into the economy, if the money does not reach the right destination it will not have the desired effect,” said Krugel. — I-Net Bridge