Oct 18, 2012
Salary increase freeze to cost SA R5bn in lost tax revenueBack
Agriculture|Africa|Econometrix|Mining|System|Africa|Europe|South Africa|United States|Manufacturing|Product|Services|Azar Jammine|Infrastructure|Jacob Zuma
© Reuse this
Jammine, who was speaking at a Decision Process International business breakfast, was commenting on President Jacob Zuma’s call for salary increase freezes in both the public and private sectors.
Zuma stated that CEOs and executive directors in the private sector and senior executives in the public sector should freeze salary increases and bonuses over the next 12 months, as a signal of a commitment to build an equitable economy.
Meanwhile, Jammine said that the lack of progress in educating the South African workforce, compared with the rest of Africa, was stunting economic development.
He also noted that the rest of Africa’s governments had increasingly improved governance of their countries, as well as macroeconomic improvements and stability, while South Africa seemed to be going in the opposite direction.
“We are lacking leadership and we need governmental intervention in the interest of reducing inequality,” Jammine said.
South Africa had the potential to exploit the opportunities for growth in the rest of the continent; however, the country’s strong links with advanced countries in Europe and the US would act as a drag on overall economic growth over the next five years.
“The structure of the South African economy (with significant exports and very little manufacturing) is one that is moving in a very unfortunate direction in terms of employment. Mining and agriculture have consistently lagged behind the national economic growth rate, and unfortunately those are the very sectors that can employ, gainfully, people without skills,” Jammine added.
Further, skilled sectors such as telecommunications, transport, financial services, retail and tourism were now taking the forefront in the economy. “We have an abundance of unskilled workers, but a declining unskilled sector to employ them into, which is problematic, as inequality is increasing” he said.
Jammine further said the solution to mitigate these problems had already been drafted in the form of the National Development Plan, which has now been officially endorsed by Cabinet.
“The plan is to spend about R845-billion over the next three years on infrastructure development, with the bulk, about 35% in electricity. Further, it aims to raise exports, increase the size and effectiveness of the innovation system, improve the functioning of the labour market and support small business.
“However, because Cosatu doesn’t support it, and the Presidential election is coming up, which means that certain parties would not want to upset its tripartite alliance, the plan is kept hush-hush,” he said.
Jammine concluded that the South African economy was growing, but at a very slow rate. “Two per cent gross domestic product growth a year is boring, but it has been one of the most stable growth rates in the world over the last 20 to 30 years. If you keep growing 2% to 4% each year, the size of the economy is expanding and you would need more infrastructure as it grows,” he said.
Edited by: Mariaan Webb© Reuse this Comment Guidelines (150 word limit)
Other Economy News
International consulting engineering company Royal HaskoningDHV (RHDHV) has appointed Salani Sithole as South African MD, effective March 1. Sithole has been with the company for six years and, prior to joining RHDHV, held various positions in engineering consulting,...
Recent Research Reports
Construction 2015: A review of South Africa’s construction sector (PDF Report)
Creamer Media’s Construction 2015 Report examines South Africa’s construction industry over the past 12 months. The report provides insight into the business environment; the key participants in the sector; local construction demand; geographic diversification;...
Liquid Fuels 2014 - A review of South Africa's Liquid Fuels sector (PDF Report)
Creamer Media’s Liquid Fuels 2014 Report examines these issues, focusing on the business environment, oil and gas exploration, the country’s feedstock supplies, the development of South Africa’s biofuels industry, fuel pricing, competition in the sector, the...
Water 2014: A review of South Africa's water sector (PDF Report)
Creamer Media’s Water 2014 report considers the aforementioned issues, not only in the South African context, but also in the African and global context, and examines the issues of water and sanitation, water quality and the demand for water, among others.
Defence 2014: A review of South Africa's defence industry (PDF Report)
Creamer Media’s Defence 2014 report examines South Africa’s defence industry, with particular focus on the key participants in the sector, the innovations that have come out of the sector, local and export demand, South Africa’s controversial multibillion-rand...
Road and Rail 2014: A review of South Africa's road and rail infrastructure (PDF report)
Creamer Media’s Road and Rail 2014 report examines South Africa’s road and rail transport system, with particular focus on the size and state of the country’s road and rail network, the funding and maintenance of these respective networks, and the push to move road...
Real Economy Year Book 2014 (PDF Report)
This edition drills down into the performance and outlook for a variety of sectors, including automotive, construction, electricity, transport, steel, water, coal, gold, iron-ore and platinum.
This Week's Magazine
National flag carrier South African Airways (SAA) is in an advanced stage of renegotiating its deal with European airliner manufacturer Airbus to acquire A320 single-aisle (or narrow body) aircraft. The aim is to replace ten of the aircraft still on order with five...
Worldwide, the main thrust in the ports industry over the past decade or more has been to increase efficiency. Traditionally, ports have been run by engineers and mariners and, in the past, increasing a port’s capacity was achieved by expanding the harbour. “That has...
What do you do when an elephant has a toothache? You call Dr Gerhard Steenkamp from the University of Pretoria’s (UP’s) faculty of veterinary science, Onderstepoort, one of only two elephant ‘dentists’ in the world.
The 2015 Sanlam/Business Partners Entrepreneur of the Year (EOY) competition was launched earlier this month in Johannesburg, with the main focus on creating and inspiring entrepreneurs to create jobs and boost the economy.
In a recent letter to the editor that I sent to Engineering News (Concerns regarding South African portion of Square Kilometre Array) and in a follow-up article elaborating further (We must start preparations to build our own synchrotron light source), I stated my...