The 51% annualised quarter-on-quarter GDP contraction of the South African economy, announced by StatsSA, was a wake-up call to the undeniable fact that we can no longer afford to delay the implementation of the much-needed economic structural reforms. When Covid-19 hit our shores, it delivered the final blow to an economy that was already in deep crisis due to years of policy inertia and entrenched structural problems.
Click here to view Economic structural reform tracker
President Cyril Ramaphosa’s admission to Finance Minister, Tito Mboweni, in March 2020 that “we now need to move more boldly on the structural reforms programme” turned out to be another false promise. It is but one of the many occasions where the President has made commitments to drive a reform agenda only to retreat to a state of inertia and policy paralysis.
However, the economic devastation brought about by the Covid-19 hard lockdown, has forced the government’s hand. A programme of economic structural reform has become imperative, not to grow the economy, but to save it from destruction.
A draft Economic Recovery Action Plan, worked out by President Cyril Ramaphosa and NEDLAC, has been touted as a blue print to ‘fast track urgent structural reforms” and stimulate economic growth.
The DA has taken the first step to hold the President accountable to this commitment by introducing an Economic Reform Tracker. The tracker’s primary purpose will be to act as a progress assessment tool for economic reforms. It will use a 5 key score weighting system, with 1 representing the lowest score on economic structural reform and 5 representing the highest score, where a structural reform policy has been adopted and its impact measured.
Using this weighting system, the tracker will measure progress on economic structural reform on 5 thematic areas, namely, Public Finance Reform, Energy Sector Reform, State-Owned Enterprise Reform, Reducing Corruption and Labour Market Reform.
Using this tracker’s methodology, the DA’s initial assessment has shown that South Africa’s progress on structural economic reform has not made any movement beyond stage 1. The plethora of commitments by various government functionaries to pursue a sustained programme of economic reform has not been met with a corresponding plan of action.