The Organisation for Economic Cooperation and Development (OECD) says major reforms will be needed if South Africa is to tackle challenges like unemployment, Business Day reported on Tuesday.
In the OECD's Economic Survey of SA, released on Monday, the organisation says South Africa needs at least 2 percent economic growth to begin to tackle unemployment. The country also needs structural reforms, the OECD says.
This includes a stronger, fairer labour market, and a regulatory framework that fostered entrepreneurship and encouraged small business development, Business Day reported.
South Africa's growth forecast for 2017 is 0,6 percent.
OECD secretary-general Angel Gurria reportedly said, "That's not going to make or break SA. It's double last year but it's half of next year and it's still very low. You need opportunities to come up. Where are they going to come from? We need a cruising speed for growth that is much higher than we have today in order to absorb all the young men and women who are seeking opportunities."
The OECD reportedly warned that South Africa's paradox was needing skills development, with a red tape burden on small businesses and a lack of quality education and skills.
"You have a bunch of people unemployed and at the same time, companies are complaining they can't get the necessary skills. How are you going to have a foreign investor come to SA if they don't think you have an abundance of skills?" Gurria said.
Finance minister Malusi Gigaba reportedly welcomed the survey, which he said came at a time when South Africa was tackling these challenges through a 14-point action plan which ""makes a genuine attempt to respond to some of the challenges raised in the [survey] to provide political and policy certainty, raise consumer and business confidence, reignite growth ... and thus begin the path of raising our growth levels faster, bigger, inclusively and on a sustainable basis".Suggest a correction