South Africa needs to improve business regulation to support job creation and privatise state-owned companies in markets with sufficient competition, the Organisation for Economic Co-operation and Development (OECD) said on Friday.
South Africa also needs to boost electricity generation by speeding up the independent power producer programme and facilitating private co-generation, the international think tank said in a report.
Growth in Africa's most developed economy was also being hampered by inadequate tax revenue needed to support infrastructure projects.
"The public sector will face considerable resource needs in the years ahead to expand social and economic infrastructure," the OECD said.
"Meeting these needs will require increased revenues, but this must be equitable and not penalise growth."