Competitiveness Framework Summary Report

Productivity and Competitiveness Framework for South Africa Unlocking the potential of productivity to sustain economic growth and improve competitiveness 2019/20. The National Development Plan (NDP) envisions achievement of a “capable and developmental state” by achieving an average GDP growth rate of 6%. The NDP aims to reduce inequality and eliminate poverty by 2030. In particular, Chapter 4 of the NDP acknowledges the importance of productivity by providing that South Africa must raise the levels of employment through productivity growth and the earnings of working people in order to eliminate poverty and reduce inequality. The Productivity and Competitveness

Framework presents one of the bold steps that Productivity SA is taking in raising labour productivity to contribute towards achievement of the goals of the NDP. As South Africa approaches its vision of becoming a developmental state and an inclusive economy by 2030, productivity improvement is key to achieving sustainable economic growth.

South Africa’s economic growth have seen mixed results over the last two decades, which to date have remained volatile. In the past five years, economic growth has been very disappointing. The economy continues to shed jobs and it has also been experiencing slow to zero growth. Since the dawn of the democratic dispensation in 1994, South African economic growth has been mainly input-driven through public and private sector investment and labour. For example during the period 1999 to 2008, under the Growth Employment and Redistribution (GEAR) Strategy , economic growth responded positively to the stimulus from public sector infrastructure investment. Although the economy registered positive economic growth, the formal sector was unable to generate employment. This means that economic growth has become very costly to sustain with every unit of input injected into the economy generating less jobs and low levels of Gross Domestic Product (GDP). The foremost challenge for South Africa is to ensure that increments in capital and labour expenditure are accompanied by corresponding/ simultaneous increments in productivity growth.