Economic Environment of South Africa
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- South Africa’s macro-economic environment is resilient and we are open for business
• Our prudent fiscal management and monetary policies have created macroeconomic stability.
• According to the World Economic Forum’s Global Competitiveness Index 2015/16, South Africa improved by four places to stand at 85 out of 140 countries in terms of its macro-economic environment.
• South Africa is a competitive business and investment destination.
• The country recently climbed seven places to take a spot in the top 50 out of 140 countries in WEF’s Global Competitiveness Index. South Africa stands at number 49.
• South Africa is also ranked fourth out of 54 African countries in the Ibrahim Index on African Governance.
• Changing global economic conditions will necessitate the strengthening of our policy framework to ensure we can respond effectively.
• South Africa is cognisant of the impact of the falling commodity prices, on our economy. The weakness in commodity prices is a concern for major commodity exporters such as South Africa. The fall in commodity prices is unlikely to reverse and will have a sustained impact on emerging market economies. This will serve as an impetus to prioritise the further diversification of our economy away from an over-reliance on commodities.
• The depreciation of the rand occurs within a broader international context which is currently characterised by a fair amount of turbulence
• The implementation of the National Development Plan (NDP) remains the cornerstone of our economy.
• The NDP is supported by the Nine-Point plan for economic renewal.
• In supporting the NDP government is acting to alleviate the most binding constraints to growth and has set out a series of urgent economic reforms to build a more competitive economy. These include:
1. Continued investment in economic infrastructure
2. Reforming the governance of the State Owned Companies, rationalising state holding and encouraging private-sector participation
3. Expanding the independent power producer programme
4. Encouraging affordable, reliable and accessible broadband access
5. Promoting black ownership of productive industrial assets
6. Finalising amendments to the Mineral and Petroleum Resources Development Act (2002), and continuing dialogue with the industry; and
7. Reviewing business incentive programmes in all economic sectors to ensure that resources support labour-intensive, job creating outcomes.