http://www.oecd.org/eco/surveys/economic-survey-south-africa.htm

OECD

OECD Economics

2015 OECD ECONOMIC SURVEY OF SOUTH AFRICA

For a strong and inclusive country

Pretoria, 17 July 2015

2

Social progress has been impressive

1. Access to piped water is mostly through a tap in a house but includes other infrastructure such as communal taps.Source: Statistics South Africa; World Bank WDI Database

Services have been broadened and poverty has been alleviated through social grants

3

Growth is falling behind

GDP per capita over the past two decades

Source: World Bank WDI Database

4

Infrastructure bottlenecks must be tackled, especially in electricity

Electricity generation

Source: Statistics South Africa

5

Wage negotiations are too confrontational

Working days lost to strike action1

1. Working days lost are a function of the number of workers on strike and the duration of the strike.Source: Andrew Levy, Wage Settlement Survey, quarterly reports

6

Growth has not been inclusive enough

Mid 2000sLatest available

Source: World Bank WDI Database; Statistics South Africa

7

Less than half of the working-age population has a job, driving inequality

Working-age population (15-64 year olds)2015Q1

Source: Statistics South Africa (But 26% of the labour force)

8

SMEs face too many obstacles

Barriers to entrepreneurship

Res

tric

tiven

ess

Source: OECD (2014), Product Market Regulation Database

9

There is scope to raise revenue for social spending and infrastructure

General government current revenue2013, % of GDP

Note: “OECD EMEs” are five emerging market member countries: Chile, Hungary, Mexico, Poland and Turkey.Source: OECD Databases; IMF WEO Database

10

Key Recommendations

• Use independent producers to increase electricity capacity, and ensure prices reflect costs.

• Increase the role of mediation and arbitration to make wage negotiations less confrontational.

• Establish a public employment service as a one-stop shop for job seekers.

• Expand affordable public transport.

• Build housing closer to economic centres.

• Support SMEs by reducing the regulatory burden and eliminating entry barriers and regulation that limits competition.

• Broaden key tax bases. Increase taxation of high income earners to make the tax system more progressive.

ADDITIONAL MATERIAL

12

Economic growth has been strongest in the richest regions

Real GDPIndex, national value in 2003 = 0

Real GDP per capitaIndex, national value in 2003 = 0

Source: OECD calculations based on Statistics South Africa data.

13

Environmental challenges are large

Energy intensity1

South AfricaSouth Africa

Water stress2

1.Total primary energy supply per unit of PPP-adjusted GDP in 20122.Gross use of freshwater as % of available freshwater resources in 2011 or latest availableSource: IEA Databases, OECD Environmental Database

Iceland

Russia

Korea

BelgiumItaly

14

Some types of infrastructure spending have risen

% of GDP

1. Roads, bridges, dams, electricity, water supply, etc.2. Schools, hospitals, etc. and administrative services.Source: SARB Database

% of GDP

15

Public transportation still needs to be improved

Source: FFC (2013) “Effective Devolution of Transport Functions to Municipalities: Towards an Optimal Transport System” in Submission for the 2014/15 Division of Revenue, Financial and Fiscal Commission

Composition of commuter transport used2013

16

High cost port services are eroding competitiveness

USD per container (20 foot eq. unit)

Source: ITF (2014), “The Competitiveness of Ports in Emerging Markets – the Case of Durban, South Africa”, International Transport Forum, Paris.

USD per container(20 foot eq. unit)

Total price of port services

17

The regulatory burden is high

Res

tric

tiven

ess

Economy-wide indicator of product market regulation

Source: OECD (2014), Product Market Regulation Database

18

Regulation is especially high in network sectors

Res

tric

tiven

ess

Regulation in network sectors(energy, transport and communications)

Source: OECD (2014), Product Market Regulation Database

19

Taxes are administered efficiently but coverage is still narrow

Individuals who paid

income tax

Administrative costs for tax administration2011

Registered taxpayersMillions

Note: “OECD EMEs” are five emerging market member countries: Chile, Hungary, Mexico, Poland and Turkey.Source: OECD (2013),Tax Administration 2013; National Treasury and SARS (2014, 2013), Tax Statistics.

20

More Information…

www.oecd.org/eco/surveys/economic-survey-south-africa.htm

OECD

OECD Economics

Disclaimers: The statistical data for Israel are supplied by and under the responsibility of the relevant Israeli authorities. The use of such data by the OECD is without prejudice to the status of the Golan Heights, East Jerusalem and Israeli settlements in the West Bank under the terms of international law.This document and any map included herein are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area.