Don’t take future growth for granted in South Africa – Parsons

South Africa must not take future growth performance for granted, Raymond Parsons of the National Economic Development and Labour Council (Nedlac) said on Wednesday.

He was addressing the first session of the South African Economics Seminar in Johannesburg on the theme "The Economic and Business Environment in SA".

Parsons cautioned that although the South African economy was in many ways bigger, stronger and better than in 1994, "the economy is not on 'cruise control' or 'automatic pilot' - and future growth performance must not be taken for granted".

To achieve the Accelerated and Shared Growth Initiative for South Africa (AsgiSA) growth target of six percent, additional efforts would have to be made to overcome "binding constraints", he said.

The uncertainties and changes in the global economy made it even more important to make the further necessary structural reforms in the economy that was under South Africa's control.

Parsons said that unless South Africa made more rapid progress in removing the key constraints on its economic performance, the risk existed not of an economy growing at six percent beyond 2010, but of a three to four percent "growth trap" in that period, insufficient to meet the country's development agenda.

He added that central to raising the rate of growth in South Africa and achieving a fairer society had much to do with strengthening state capacity where it mattered, or otherwise devising new and innovative mechanisms to ensure effective delivery.

Business and a new government after 2009 would have to work "in partnership" to think creatively about prioritising implementation.

Policies did matter, but so did the institutions and mechanisms through which they were approved and implemented, he said.

A strong delivery culture needed to be developed and embedded in South Africa's public sector if the goals of AsgiSA were to be achieved.

Turning to the role of business, Parsons said that with a watershed general election pending in 2009, business should accept that the economic and political future of the country was too important to be left only to the politicians.

"Business should in a structured way develop its own vision of the future, drawing on experience to date and on research already done on preferred economic options."

Business needed to help South Africa respond constructively to the socio-economic challenges of the next few years, Parsons said.