SA Trade balance : 'No balance, no lasting growth'
South Africa's economic growth would not be sustainable if it continued to be driven mainly by the exports of raw materials and an emerging black class that consumed mostly imported goods, deputy president Phumzile Mlambo-Ngcuka has warned.
Speaking yesterday at the official opening of the first SA Trade and Investment Conference and Exhibition, Mlambo-Ngcuka called for a balance and diversification of the country's economic growth engines.
"South Africa is a nation at work," she said. "Last year all our provinces grew by an average 3 percent of gross domestic product per annum and indicators are that we can grow faster and move robustly.
"But we need a balanced approach," she added. "We cannot rely on exports of raw minerals and consumption of imported goods."
The economy has been growing an average 5 percent over the past three years. August trade figures from the SA Revenue Service show an increase of 0.8 percent in exports to R42.5 billion.
South Africa mainly exports gold and other metals, diamonds, cars and machinery.
This growth has been widely credited to South Africa's black middle class, which has amassed considerable buying power.
Azar Jammine, chief economist at Econometrix, was encouraged to hear Mlambo-Ngcuka addressing these weaknesses. "She is correct to highlight these weaknesses because though we have had a boom in the economy in the last three years, not everything is as it should be, and that is because our skills base is not sufficient to produce more locally.
"Even the growth of the black middle class goes hand in hand with skills, because if we do not develop enough skills, in the long run, they will not be able to take on jobs."
Mlambo-Ngcuka reiterated the government's support for black economic empowerment, saying that it was a necessary ingredient for the country's economic growth.
"We cannot have a part of the country where some people do not participate in the economy," she said.
In support of Mlambo-Ngcuka's comments, Tshediso Matona, director-general at the department of trade and industry, said the codes of good practice, which were finalised earlier this year, had spurred empowerment activity.
Matona said: "We are also seeing a lot of [empowerment] activity in the mining and telecommunications sector as well, and there are a lot of multinationals who are taking it up. These are deals which are larger and more broad based."
