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Introductory Remarks

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Dr Renosi Mokate

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PEAC Coordinating Chairperson

14 July 2022

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CONFIDENTIAL NOT FOR DISTRIBUTION

Current Economic Context

• PEAC members continue to be deeply concerned about the poor performance of the South African economy
• Despite the reforms articulated in the Economic Reconstruction and Recovery Plan (ERRP), in October 2020, and other government policy interventions, levels of economic growth and investment remain too low and levels of unemployment and poverty too high.
• See chart showing GDFI declining to 13% of GDP in 2021(lowest level on record)
• In this context, our economic policies need to be updated with the aim of improving our economic performance.
• We thank you Mr President for the opportunity to present to you today some of our thinking on key policy matters, which is outlined more fully in our Briefing Note on Current Economic Policy Matters dated July 2022

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Focal Areas for today’s meeting

• The need to reshape our energy security policies with the objective of reducing and ultimately ending ongoing load shedding in as short a time as possible. (Based on a Note prepared by Grové Steyn.)
• Improved policy on immigration - both how we better facilitate the immigration of skilled labour often linked to investment and also linked to our higher education system, and how we manage the inflow of less skilled, documented and undocumented people. (Based on Notes prepared by Alan Hirsch and Haroon Bhorat.)
• Strengthening state capacity at all levels through interventions such as those to strengthen local government, improved competition policy and merger control and through mission-oriented policies. (Based on Notes prepared by Liberty Mncube, Ayabonga Cawe and Mariana Mazzucato.)
• Our July Briefing Note contains an input on the need to refocus our industrial and employment policy to also include lower-productivity and informal sector activities. (Based on a Note prepared by Dani Rodrik who could not attend today’s session due to prior commitments.)

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In thinking about these matters, since the beginning of this year, PEAC members have met with:

• The Head of Country Studies from the Organisation of Economic Cooperation and Development (OECD) on 1 February 2022
• The Department of Planning, Monitoring and Evaluation (DPME) and Department of Cooperative Governance and Traditional Affairs (CoGTA) to discuss the District Development Model on 2 February 2022
• The Presidential State-Owned Enterprises Council (PSEC) for an information sharing session on 29 March 2022
• The Department of Social Development (DSD) and the South African Social Security Agency (SASSA) to discuss the Social Grants on 04 May 2022
• The Department of Employment and Labour (DEL) and the Department of Higher Education (DHET) on 9 June 2022 to discuss labour and immigration
• The Economic Advisor to the President, Ms Trudi Makhaya, Operation Vulindlela and Advisors to the Economic Cluster Ministers

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With the overall objective of Inclusive growth PEAC will continue the work of its various workstreams

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Thank-you

• We trust that today’s session will be useful for the President to gain deeper insight into key economic policy questions facing South Africa
• Members of PEAC stand ready to assist the President should you raise any other economic policy areas on which you would might require input or advice
• We are aware that time is limited for today’s meeting, so we have asked that inputs be kept to a maximum of 10 minutes, so that the President can have time after each presentation to ask any questions and then it is hoped that at the end of the session, once all presentations have been made, there will be some time for discussion.
• We thank-you!

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Presidential Economic Advisory Council

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