OECD Economic Surveys: South Africa 2017
Over the last two decades, South Africa has accomplished enormous social progress by bringing to millions of citizens access to key public services. Nevertheless, growth has trended down markedly recently due to constraints on the supply side. Low growth has led to the stagnation of GDP per capita, and persistent high unemployment and inequalities.
The economy faces many structural challenges while high inflation limits room for monetary policy support and high public debt constrains public spending. South Africa needs structural reforms that would boost the potential of the economy, in particular, broadening competition, limiting the size and grip of state-owned enterprises on the economy, and improving the quality of the education system.
Greater regional integration could provide new opportunities for growth by expanding market size. South African firms are well placed to benefit from deeper integration. However, lowering tariffs and non-tariffs barriers on trade, developing regional infrastructure and harmonising regulations are needed to foster regional integration.
More entrepreneurs and thriving small businesses would contribute to inclusive growth and job creation. Barriers to entrepreneurship include bureaucratic procedures and licensing, which are also an ongoing burden on small firms. An education system that better equippes students with basic and entrepreneurial skills would grow the pipeline of entrepreneurs. A better evidence base is crucial for more effective financial and non-financial support programmes to boost start-up rates and small firms’ growth.
SPECIAL FEATURES: DEEPENING REGIONAL INTEGRATION; BOOSTING ENTREPRENEURSHIP
Basic statistics of South Africa, latest available year
(Numbers in parentheses refer to the OECD average)
This Survey was prepared in the Economics Department by Falilou Fall and Christine Lewis under the supervision of Piritta Sorsa. It has benefited from valuable background research by Boingotlo Gasealahwe, seconded from the South African National Treasury. Iris Mantovani and Iza Lejarraga from the directorate for Financial and Enterprise Affairs and Charles Cadestin from the Trade and Industry directorate contributed to the Survey. Statistical research assistance was provided by Taejin Park, Hermes Morgavi and Pedro Herrera Gimenez. General administrative assistance was provided by Brigitte Beyeler, Anthony Bolton, Raquel Paramo and Heloise Wïckramanayake. The previous Survey of South Africa was issued in July 2015.The Survey was discussed at a meeting of the Economic and Development Review Committee on 12 June 2017 with participation of representatives of the South African government and representatives of France and Portugal as lead speakers.