While government concurs with the International Monetary Fund’s (IMF) view on the need to implement reforms as set out in the National Development Plan (NDP), it remains committed to achieving inclusive growth that will create jobs.
“Government concurs with the IMF’s views on the urgency to advance the implementation of our reform agenda as set out in the National Development Plan. We remain committed to achieving inclusive growth that will create jobs, eradicate poverty and reduce inequality,” said National Treasury.
Treasury was responding to the IMF’s Article IV consultation with South Africa that took place between 28 May and 11 June 2018.
As part of its surveillance mandate prescribed in the IMF’s Articles of Agreements, the fund visits each of its member countries annually to conduct an economic and financial assessment of government policies and provide policy recommendations.
During the consultation, the IMF met with various stakeholders, including government, state-owned enterprises (SOEs), business, organised labour and academia.
Treasury said Cabinet, on 4 July 2018, considered and noted the content of the report and acknowledged key risks identified and policy recommendations made by the IMF.
South Africa values on-going engagements and work programmes with all multilateral institutions, including the IMF.
The IMF acknowledged that South Africa’s economy remains well integrated in the global economy, diversified and has a sophisticated financial services sector.
The IMF in its review welcomed ongoing initiatives to further buttress financial sector stability, including the new Financial Sector Regulation Act that lays the foundations of the Twin Peaks model of financial regulation.
In addition, the IMF noted that strong institutions and a young workforce will contribute to higher growth potential.
The report, however, noted impediments to growth including policy uncertainty and regulatory overreach that hinders private investment, inefficiencies in state-owned enterprises (SOEs), labour market rigidities, insufficient competition in product markets and corruption.