The South African economy is growing at a slower pace than other leading emerging economies and the country urgently needs to implement growth-enhancing reforms, a survey by OECD warned Monday.
The report identified reforms to improve competitiveness, the education system and better use macroeconomic policy to support growth.
“A high proportion of the population is out of work; offering people a brighter future by creating jobs is a policy priority,” said Angel Gurria, Secretary General of the Organisation for Economic Co-operation and Development.
Growth in Africa’s largest economy lags behind that of its peers in BRICS, a league of top emerging economies which also includes Brazil, Russia, Indian and China.
The countries will later this month hold a summit in South Africa to discuss economic issues.
Last week, Finance Minister Pravin Gordhan told parliament that growth would be a modest 2.7 percent this year, amid “enormous challenges facing the country”.
The rate is remarkably lower than some of smaller economies in the region, like oil-rich Angola and diamond-rich Botswana.
“Income inequality remains high, educational outcomes should be improved and access to education needs to be inclusive,” said Gurria, noting that the country had recorded “tremendous success” in some areas of economic and social policies.
“Per capita income is rising, public services are expanding, health indicators are improving and public finances are in better shape than in many OECD countries.”
The report noted that many South Africans were “excluded from work altogether, contributing to poverty, inequality, and ill health”.
Official figures place unemployment at 25 percent, but the number is believed as high as 40 percent, including discouraged job seekers.
The organisation said that improving labour market institutions like schools should be a high priority.
“If South Africa is to achieve full employment, the quality of basic and vocational education must be improved,” said Gurria.