Failure to deliver more inclusive growth in South Africa would be a threat to social stability, and the country had to do more to tackle its domestic problems, the International Monetary Fund (IMF) said on Wednesday.
Many analysts would argue that South Africa’s social fabric has already started to unravel, with a wave of often violent strikes in the mining sector over the past year and more service delivery protests.
Global credit rating agencies cited the unrest as one of the reasons for their decision to downgrade South Africa in the past several months, saying it would take time for the country to resolve its structural problems of unemployment, poverty and inequality.
› SARB may cut rates on growth slowdown
› IMF warns SA of 'threat to stability'
"In the long run, failure to deliver inclusive growth would be a threat to social stability," said David Lipton, senior deputy MD of the IMF. "The imperative now is to generate growth that will create the millions of jobs to reduce unemployment ."
Mr Lipton was speaking at the University of Pretoria before attending the World Economic Forum on Africa in Cape Town.
South Africa’s jobless rate climbed to 25.2% in the first quarter of the year, up from 24.9% in the previous one, according to a labour force survey Statistics South Africa released earlier this week.
One in two of every young South Africans is unemployed.
"The ingredients for social unrest are already in place," said Stanlib economist Kevin Lings. "You don’t have to go all the way to a social revolution if you already have destabilised elements."
Mr Lipton said South Africa had made great strides in promoting economic and social development since apartheid ended but "clearly" not enough had been done. The country’s economic growth outlook was still "subdued" and was likely to remain so.
The IMF has predicted that South Africa’s economic growth will accelerate to 2.8% this year from 2.5% in 2012 and rise to 3.3% in the following one.
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