Raising South Africa's Speed Limit
In order to understand South Africa's poor economic performance since the end of Apartheid, this study focused on key features that set South African economy apart from many other, successful countries. The very low levels of labour participation in South Africa are a good place to start. Relatively few people are looking for work, and those who are, find it very difficult to make it into a job. This has to be overcome if the country wants to have any hope of creating opportunities for the poor. Significant expansion of export sectors must urgently take place, in order to create the jobs that South Africa need. Unfortunately, South Africa’s export performance is dismal. Mineral exports are declining and manufacturing remains stagnant. Until these structural problems are overcome South Africa will not grow and unemployment will remain unacceptably high. Driving above the economic ‘speed limit’ that the current environment imposes will only lead to further problems. What South Africa needs is to implement the changes that will permanently raise this limit. To do that some core policy challenges must be addressed urgently. Mineral beneficiation has long been considered by many in government and the ANC as the panacea for South Africa’s woes, but focussing on this relatively difficult to achieve economic outcome is unnecessarily costly while preventing policy makers from seeing other opportunities for economic development.