Africa’s second largest economy is stuck in the slow lane; this is according to HSBC’s economist, David Faulkner.
“If you look at the performance over the past two decades particularly since the end of the financial crisis, South Africa’s growth performance has been disappointing,” Faulkner added.
He lamented South Africa’s slow growth saying the country had lagged behind other major emerging economies.
“The country has been growing at half the pace of other major emerging economies which has led to a number of troubling socio-economic outcomes such as elevated inequalities and unemployment,” he said.
He called for a holistic approach on addressing infrastructural and other structural challenges.
“The view right now is that energy is what matters, but the problem with this discourse is that it ignores other critical elements,” he warned.
“As HSBC we are worried that the focus of the debate is just on energy and that tunnelling means we might miss other structural issues that are capping growth rate.”
He also urged flexibility by labour unions that will improve employment creation.
“The relationship that exists between government and labour unions arguably frustrates any kind of movement toward labour market flexibility that could accelerate job creation,” he said.
He called for improved focus on economic growth that allows more people into the job market.
“What we want to see is a much faster growth in employment with much more people earning incomes which will eventually raise the income share of the poorest in the society,” added Faulkner.