Lack of structural, fiscal reform retards SA's progress — IMF

Non-implementation of structural and fiscal reforms to support growth and stabilise public debt in South Africa stand in the way of real economic growth, a senior International Monetary Fund (IMF) official says.

- Eric Mthobeli Naki

To put its debt on a firmly downward path, SA should have more ambitious fiscal consolidation, at least 1% of GDP consolidation per year for three years.

This has to be accompanied by a fiscal rule with a debt ceiling that could help underpin the adjustment and support policy credibility.

This was part of a presentation by Tidiane Kinda, the IMF's senior resident representative in SA during a discussion on consultation with SA organised by the Mapungubwe Institute for Strategic Reflection and the IMF in Johannesburg last week.

Regarding concerns about the huge public wage bill, Kinda said the number of public servants was not a problem, but the exorbitant salary premium was an issue.

He said salaries in the public sector were larger than in the private sector.