South Africa 2015 strong inclusive and sustainable growth 17 July

1. http://www.oecd.org/eco/surveys/economic-survey-south-africa.htm
OECD
OECD Economics
2015 OECD ECONOMIC
SURVEY OF SOUTH AFRICA
For a strong and inclusive country
Pretoria, 17 July 2015

2. 2
Social progress has been impressive
1. Access to piped water is mostly through a tap in a house but includes other infrastructure such as communal taps.
Source: Statistics South Africa; World Bank WDI Database
Services have been broadened and poverty has been alleviated through social grants

3. 3
Growth is falling behind
GDP per capita over the past two decades
Source: World Bank WDI Database

4. 4
Infrastructure bottlenecks must be tackled,
especially in electricity
Electricity generation
Source: Statistics South Africa

5. 5
Wage negotiations are too confrontational
Working days lost to strike action1
1. Working days lost are a function of the number of workers on strike and the duration of the strike.
Source: Andrew Levy, Wage Settlement Survey, quarterly reports

6. 6
Growth has not been inclusive enough
Mid 2000s
Latest available
Source: World Bank WDI Database; Statistics South Africa

7. 7
Less than half of the working-age population
has a job, driving inequality
Working-age population (15-64 year olds)
2015Q1
Source: Statistics South Africa
(But 26% of the
labour force)

8. 8
SMEs face too many obstacles
Barriers to entrepreneurship
Restrictiveness
Source: OECD (2014), Product Market Regulation Database

9. 9
There is scope to raise revenue for social
spending and infrastructure
General government current revenue
2013, % of GDP
Note: “OECD EMEs” are five emerging market member countries: Chile, Hungary, Mexico, Poland and Turkey.
Source: OECD Databases; IMF WEO Database

10. Key Recommendations
• Use independent producers to increase electricity capacity, and ensure
prices reflect costs.
• Increase the role of mediation and arbitration to make wage negotiations
less confrontational.
• Establish a public employment service as a one-stop shop for job seekers.
• Expand affordable public transport.
• Build housing closer to economic centres.
• Support SMEs by reducing the regulatory burden and eliminating entry
barriers and regulation that limits competition.
• Broaden key tax bases. Increase taxation of high income earners to make
the tax system more progressive.
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11. ADDITIONAL MATERIAL

12. 12
Economic growth has been strongest in the
richest regions
Real GDP
Index, national value in 2003 = 0
Real GDP per capita
Index, national value in 2003 = 0
Source: OECD calculations based on Statistics South Africa data.

13. 13
Environmental challenges are large
Energy intensity1
South Africa
South Africa
Water stress2
1. Total primary energy supply per unit of PPP-adjusted GDP in 2012
2. Gross use of freshwater as % of available freshwater resources in 2011 or latest available
Source: IEA Databases, OECD Environmental Database
Iceland
Russia
Korea
Belgium
Italy

14. 14
Some types of infrastructure spending have
risen
% of GDP
1. Roads, bridges, dams, electricity, water supply, etc.
2. Schools, hospitals, etc. and administrative services.
Source: SARB Database
% of GDP

15. 15
Public transportation still needs to be
improved
Source: FFC (2013) “Effective Devolution of Transport Functions to Municipalities: Towards an Optimal Transport
System” in Submission for the 2014/15 Division of Revenue, Financial and Fiscal Commission
Composition of commuter transport used
2013

16. 16
High cost port services are eroding
competitiveness
USD per container
(20 foot eq. unit)
Source: ITF (2014), “The Competitiveness of Ports in Emerging Markets – the Case of Durban, South Africa”,
International Transport Forum, Paris.
USD per container
(20 foot eq. unit)
Total price of port services

17. 17
The regulatory burden is high
Restrictiveness
Economy-wide indicator of product market regulation
Source: OECD (2014), Product Market Regulation Database

18. 18
Regulation is especially high in network sectors
Restrictiveness
Regulation in network sectors
(energy, transport and communications)
Source: OECD (2014), Product Market Regulation Database

19. 19
Taxes are administered efficiently but
coverage is still narrow
Individuals
who paid
income tax
Administrative costs for tax administration
2011
Registered taxpayers
Millions
Note: “OECD EMEs” are five emerging market member countries: Chile, Hungary, Mexico, Poland and Turkey.
Source: OECD (2013),Tax Administration 2013; National Treasury and SARS (2014, 2013), Tax Statistics.

20. More Information…
www.oecd.org/eco/surveys/economic-survey-south-africa.htm
OECD
OECD Economics
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