South Africa: Get Your Act Together Now, IMF Tells SA

analysis

There is no missing the new urgency, particularly following the government's medium-term budget policy statement (MTBPS), which the International Monetary Fund says candidly confirmed SA's fragile fiscal and debt situation.

The International Monetary Fund (IMF) has released its latest Article IV statement, which adds to a chorus of warnings that SA's economic position is now extremely precarious and suggesting much deeper cuts in government expenditure than those currently proposed by the Treasury.

The statement, which follows the regular IMF staff visit to SA, touches on now-familiar issues of huge problems with state-owned enterprises and low economic growth. But the tone is different: urgent, imperative and dire.

Some SA economists are for a "Keyensian solution" of increased government spending to solve SA's economic problems and they argue passionately against an "austerity government". The IMF is having none of it.

In its Article IV statement following its regular, typically annual, consultations with government, the organisation says:

"A more decisive approach to reform is urgently needed. Impediments to growth have to be removed, vulnerabilities addressed, and policy buffers rebuilt. Expediting structural reform implementation is the only way to sustainably boost private investment and inclusion."

There is no missing the new urgency, particularly following...

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