South Africa needs an 8 % growth rate

Minister of Finance, Pravin Gordhan, has said that government will be working towards maintaining the 2 to 3 percent economic growth rate of recent years.

This is unacceptable. We should be targeting much higher growth rates. That is the only way to create the jobs we need to lift hundreds of thousands of South Africans from poverty.

The Democratic Alliance (DA) believes we should be targeting a growth rate of 8 %. Next month we will be releasing our plan for South Africa to achieve 8% growth.

This is in line with growth potential in other developing economies. Growth rates between 2 and 3 percent are what the struggling Western economies are producing. Instead, we should be positioning ourselves to grow at rates similar to those of our peer countries.

A growth rate of between 2 and 3 percent will not be enough to pull people out of poverty. Such a rate will only maintain the status quo.

The ANC clearly does not have a plan to achieve faster growth. Instead of adopting the necessary measures to open up our country to more investment, growth and job creation – like the youth wage subsidy or labour market liberalisation – the ANC is intent on placing more shackles on growth. The “50% resource rent tax” that is being discussed at its policy conference this week is just the latest example.

The time has come to put high economic growth and job creation first. That is the only real way to improve people’s lives.

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