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South Africa needs a "wholly new" approach to stimulate confidence in the economy and lift the country out of the current slump, according to the assessment by former ANC treasurer Mathews Phosa.
Phosa, who was the first premier of Mpumalanga province after the 1994 elections, said the time for talk was over, and that economic growth not muddied by policy uncertainty and threats of corruption was urgently needed.
"In simple terms, our economy is not growing. There is nothing technical about the recession we find ourselves in…we are in recession," said Phosa, during his address at the South African Metals and Engineering Indaba in Johannesburg.
"Every part of the economic strategy must face in one direction, and speak to the challenges of unemployment, poor growth and continuity," said the politician- turned-businessman.
According to Phosa, unblocking policy constraints and creating an enabling environment for business to thrive was the key challenge that needed government's intervention.
South Africa's economy has been battered by slow growth and poor investor confidence, with a stubbornly high unemployment rate and investment downgrades by global ratings agencies.
Figures released early this month showed that real gross domestic product decreased by 0.7% in the second quarter of the year, plunging the economy into "technical recession".
Government is mulling over a stimulus package to help kickstart the economy, with a focus on industries that hold the key to growth.
Phosa’s sentiments of a different approach to economic boost were echoed by Ann Bernstein, Executive Director for the Centre for Development & Enterprise, who lamented the decline currently seen in state-owned companies, which included the hollowing out of resources needed for stimulating growth.
"The fiscal crisis has been worsened by the situation that seen in state-owned enterprises. These are critical drivers of growth, but their role has been diminished by poor governance, and the institutions are accumulating debt at a higher rate than government.
"Fixing all of this requires a bold agenda. We can’t just call a summit and hope that jobs will arrive. We need to deal with some tough trade-offs," said Bernstein.
Government is due to hold a jobs summit in October, aimed at coming up with practical solutions to reduce the unemployment rate, which is currently at 27.2%.
The event will be followed by an international investors summit before the end of October.
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