DA's Plan for Growth and Jobs - Democratic Alliance

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In the interests of sustaining strong economic growth, it is essential that South Africa’sdeclining relative attractiveness as an FDI destination is halted and reversed.Three essential ingredients are required in order to achieve this.First, investors need policy certainty. Under the ANC, the direction of national policy changesdepending on the machinations of different factions within the party and its alliance partners.Under a DA government, policy-makers will follow a consistent line that places job creationthrough rapid economic growth front and centre.Second, South Africa needs to be proactive about identifying potential investors, and activelylobby them to invest in the country.To do this successfully, we will need a coherent and focussed strategy; a properly trainedcohort of diplomats that can promote South Africa as a reform-minded and business-friendlydestination; as well as a welcoming and facilitative domestic institutional set-up to helpinvestors integrate into the South African economy.Third, the government needs to create the right environment for business to flourish so thatboth domestic and international players receive good returns on their investments.This requires that tax rates are competitive relative to other developing countries, and thatthe South Africa’s physical infrastructure is upgraded and expanded to meet the needs of avibrant and growing economy.The current national government has, until now, furthermore neglected the importance ofinvesting in economically strategic infrastructure - such as roads, rail links, ports, dams andpower stations – instead preferring to allocate the country’s fiscal resources to items such ashigh salaries for politicians and state employees. This is a trend that also needs to bereversed.According the Department of Public Enterprises, the country has, over the past fifteen years,accrued an infrastructure backlog of R1.5 trillion. This means South Africa has effectivelymissed a generation of infrastructure investment, with adverse consequences for thecountry’s competitiveness, as well as its long-term economic growth.Take the example of the logistics sector where the economic impact of poor infrastructureplanning and maintenance is very evident.Without adequate rail infrastructure, goods have to be transported by road. This, whencombined with the impact of rising administered and regulated prices of inputs such aselectricity and fuel, has contributed to transport becoming the single-biggest factor impactingon logistics costs: 53.2% compared to the global norm of 40%.Breaking down barriers to trade with the rest of Africa and the world, and building thefoundations for long-term growth by reorienting fiscal policy to prioritise investment, are thetwo cornerstones of the DA’s growth strategy for South Africa.To achieve this we have to deepen engagement with the rest of Africa as a strategiceconomic partner; radically simplify the rules and procedures involved in importing andexporting goods in and out of the country; actively promote investment; increaseinfrastructure investment to 10% of GDP to deal with our current backlogs; and eliminatewasteful expenditure through tighter fiscal governance, so that our resources go to buildingthe economic base, rather than lining the pockets of politically-connected elites.69 | P a g e
Note that infrastructure development policies concerning energy and water supply aredetailed in the chapter that follows.Sector share of Africa’s GDP growth, 2002-2007 (100% = US$ 235 billion)Sector Sector share (%) Compound growth rate p.a.(%)Resources 24 7.1Wholesale and retail 13 6.8Agriculture 12 5.5Transport, communications 10 7.8Manufacturing 9 4.6Financial intermediation 6 8.0Public administration 6 3.9Construction 5 7.5Real estate, business 5 5.9servicesTourism 2 8.7Utilities 2 7.3Other services 6 6.9Table 10: Africa’s has experienced strong GDP growth of 4.9% p.a. from 2000 through 2008,more than twice its rate during the 1980s and 90s. According to The Economist, over thepast decade, six of the ten fastest-growing economies in the world are in Sub-SaharanAfrica. While the continent’s growth was widespread across all areas of the economy, rapidgrowth was recorded in the resources, financial, construction, tourism and utilities sectors.South Africa is in a prime position to benefit from this strong growth. Source: McKinsey andCompanyCORE CHALLENGESContinental barriers to tradeIneffective trade strategyInfrastructure backlogs hamper growthInefficient use of state resourcesPOLICY OUTCOMESEnhanced regional integrationImproved economic ties with Africa and the worldIncrease infrastructure investmentEffective resource allocation70 | P a g e
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The DA’s Plan for Growth and Jobs
Page 4 and 5:
Foreword by Helen Zille, Leader of
Page 6 and 7:
Foreword by Wilmot James, Federal C
Page 8 and 9:
LIST OF ABBREVIATIONS AND ACRONYMSB
Page 10 and 11:
PreambleThe 8% Growth Project is th
Page 12 and 13:
EXECUTIVE SUMMARYBreaking down barr
Page 14 and 15:
A preferable, more nuanced approach
Page 16 and 17:
The DA’s policy proposals in this
Page 18 and 19:
Engage Africa as a strategic econom
Page 20 and 21: This high unemployment underpins wi
Page 22 and 23: operative government’. The separa
Page 24 and 25: South Africa growth in GDP, 2000 to
Page 26 and 27: The situation is exacerbated by pol
Page 28 and 29: elieves that, with our rich mineral
Page 30 and 31: Inefficient resource allocation: Re
Page 32 and 33: credit, while the employees of thes
Page 34 and 35: have the intended effect. In develo
Page 36 and 37: FISCAL AND MONETARY POLICY PRIORITI
Page 38 and 39: Presidency and VIP security have in
Page 40 and 41: OPENING JOB OPPORTUNITIES TO ALLThe
Page 42 and 43: LONG-TERM POLICY PROPOSALSPolicy ou
Page 44 and 45: Policy outcome: Flexibility in labo
Page 46 and 47: an accredited V-TAP Certificate. Th
Page 48 and 49: SA’s global education rankingsInd
Page 50 and 51: BREAKING DOWN BARRIERS TO INCLUSION
Page 52 and 53: shareholders, and any employee alre
Page 54 and 55: SA Sports AcademyEstablish a world-
Page 56 and 57: (b) Specify that the annual financi
Page 58 and 59: Small Business Growth: A Key Driver
Page 60 and 61: Breaking down the barriers that kee
Page 62 and 63: and (ii) registering the Title Deed
Page 64 and 65: E-government in Africa (global rank
Page 66 and 67: Internet users in South Africa and
Page 68 and 69: Policy outcome: Improved state effi
Page 74 and 75: Simplify import and export procedur
Page 76 and 77: Assessment Unit, located in the Pre
Page 78 and 79: The DA in Government: ‘No Frills
Page 80 and 81: A SUSTAINABLE FUTURE FOR ALLWe have
Page 84 and 85: MEDIUM-TERM POLICY PROPOSALSPolicy
Page 86 and 87: CONCLUSIONSouth Africa’s economy
Page 88: than limit, economic opportunities
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DA's Plan for Growth and Jobs - Democratic Alliance

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