The global economy was currently not supportive of higher South African economic growth, but South African Reserve Bank (SARB) governor Lesetja Kganyago argued forcefully on Tuesday that this reality should not be used as an excuse for ignoring the ongoing domestic constraints to economic expansion, including the country’s serious infrastructure backlogs.

Speaking ahead of Finance Minister Nhlanhla Nene’s Medium-Term Budget Policy Statement, during which the National Treasury was expected to moderate its growth outlook for the economy, Kganyago said Africa’s most advanced economy faced a “challenging future”, owing to a confluence of lower commodity prices and weaker outlooks in the key trading-partner markets of Africa and Europe. The SARB had already lowered its growth outlook for 2015 and 2016 by 0.5 of a percentage point to 1.5% and 1.6% respectively.

But attention also needed to be given to homegrown limitations to economic performance, especially the prevailing shortage of electricity, which was undermining output in the farming, mining and manufacturing sectors, as well as investment in productive sectors of the economy.

“It’s too easy to sit back and bemoan the fact that we are hostage to global developments – there are things that can be done,” he told delegates to the inaugural Industrial Development Conference hosted as part of the seventy-fifth anniversary of the Industrial Development Corporation.

Many of the remedies were outlined in the National Development Plan, the New Growth Path and the Industrial Policy Action Plan, but Kganyago lamented the fact that South Africa appeared to be “under delivering” on its ambitious infrastructure plan.

“If South Africa wants to develop its industrial sector, it needs to improve its infrastructure.”

To address the country’s high rate of unemployment, it also required a “growing and competitive economy”. Such competitiveness was not simply about the exchange rate, but rather a multidimensional concept that also included the quality of the goods and services produced, reliable delivery and infrastructure, appropriate technologies and skills and a supportive business climate, where red tape was minimised.

Many manufacturers had previously appealed for SARB intervention to improve the competitiveness of the rand, particularly during periods of currency strength. However, Kganyago said the bank had learned the hard way that “trying to lean against the wind” could be both “futile and expensive”.

The bank might well intervene to smooth out short-term fluctuations, but the “best contribution the bank can make to competitiveness is to ensure that inflation is contained during period of rand weakness. It is then up to the various sectors to take advantage of the increase in competitiveness.”

He noted that, since July 2011, the nominal exchange rate had weakened by 40%, while it had fallen by 20% in real terms, when adjusted for inflation.

“However, the response of the manufacturing sector to the weakening exchange rate has been disappointing, although in recent months we have seen tentative signs of current-account adjustments, both through higher export growth and lower imports.”

The current account as a percentage of gross domestic product had declined over the past four quarters and the SARB expected it to fall to an average of 4% this year and next. The deficit fell to 3.1% in the second quarter of 2015 from a peak of 6.2% in the second quarter of 2014.