President Jacob Zuma said in his State of the Nation address that the economy needs to grow three-fold in order to create jobs. (GCIS)
Cape Town - South Africa is missing out on about 250 000 potential jobs a year because government spending is 30% under target, BDLive reported on Monday.
This is according to a KPMG report that looked into spending and the National Development Plan (NDP).
For the NDP to create 11 million jobs by 2030, the private and public sectors would need to significantly raise investments, the report noted.
"By increasing private sector investment in SA to at least 20% of GDP and government investment to 10% of GDP, we could assist in addressing the unemployment problem", Lullu Krugel, senior economist at KPMG in SA, was quoting as saying.
Krugel said this could potentially create 3.75 million job opportunities a year at the end of the NDP period.
The ANC adopted the NDP at its National Conference in Mangaung in December 2012. Among the its more ambitious targets is decreasing unemployment to 14% by 2020.
Despite President Jacob Zuma saying it will place the country on a clear growth path, the plan has received criticism from its alliance partners.
Cosatu and the SA Communist Party have expressed reservations about certain aspects of the plan, while Numsa went as far as labelling the plan as a right wing document that hijacked DA policies.
Earlier this month the SA Institute of Race Relations (SAIR) launched a scathing report on the document and raised the question of who should fund it.
There was no chapter in the 500 page document discussing how factors such as tertiary education, faster land reform, national health insurance and guaranteed minimum living standards subsidies of various kinds would be paid for, it said.
"To endorse the NDP amounts to giving government a blank cheque for more taxation and more borrowing and probably for both," it added.
Responding to the SAIR, Nomura International's emerging markets economist Peter Attard Montalto said the NDP is not without flaws, but it's the best we’ve got in the current political reality.
Montalto said he agreed with the NDP concentrating on lower wage growth as the only way to meaningfully dent unemployment, given the current skills base.
"SA cannot skip going through this level of development straight to more skilled jobs base".
Last week, ANC secretary general Gwede Mantashe said it is time to start implementing the plan and stop debating it.
"We can't debate until we are blue in the face, we must implement. We can only see what is working and what is not working in the course of implementing," he said.
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