Introduction

In recent years South Africa has performed poorly on several important economic measures, including unemployment and inequality. With the world’s highest unemployment rate and most unequal society, the country is in dire need of accelerated and more inclusive growth.

After consistent economic growth in the decade leading up to 2007, South Africa’s progress slowed dramatically after the global financial crisis (GFC) of 2008/9. In the years immediately following the GFC, the gross domestic product (GDP) growth rate has hovered between 2% and 3% and, from 2014 onwards, stagnated at about 1% before reaching an historic 6.4% contraction in the pandemic-hit year of 2020 (World Bank, 2022). The sustained period of low economic growth is reflected in rising unemployment and poverty. The most recent data indicates that unemployment rose to a record of 35.30% in the fourth quarter of 2021. Using the expanded definition, unemployment is at 46.20% (Stats SA, 2022).

Unless South Africa achieves faster and more inclusive economic growth, the country’s goals of eliminating poverty and reducing inequality and unemployment, will remain unachieved.

The Inclusive Society Institute (ISI) has embarked on a comprehensive economic research project that will culminate in a blueprint for rebooting South Africa’s economy. The first phase of the three-phase study delved into international experiences of economies that were in dire straits but managed to turn themselves around. The second phase included a series of dialogues with various sectoral stakeholders and policymakers to gain a sectoral understanding of the policies that must be corrected and to find new initiatives to shift the economy onto a higher growth trajectory. The sectors covered include agriculture, construction, energy, mining, financial, foreign investment, hospitality, information communication and technology, manufacturing, and retail.

The ISI’s research entered a consolidation phase in March 2022, bringing together several industry experts to identify the themes that require public policy interventions, as well as the priority structural reforms that should be introduced to revive the South African economy. This document is the outcome of the first consolidation exercise and identifies the main themes, interventions and policy changes that should be considered as well as the key interventions that should be included in a formal economic modelling exercise.

The final report will highlight key findings of the economic modelling exercise with the aim of projecting the potential impact of policy adjustments and structural reforms over the short, medium and long term. The blueprint will be shared with government departments, including the National Treasury, and will be presented to political parties, public policy institutions and public bodies, such as Parliament and Parliamentary Committees.