Finance Minister Enock Godongwana says the country cannot afford low returns on public sector investments, firm closures and job losses.
Godongwana made these comments during the launch of the SEAD-SA program on Monday. SEAD-SA is a program jointly developed by the National Treasury and the Humanities Research Council in South Africa.
It aims to gain a better understanding of the geographic distribution and characteristics of economic activities in the country by analysing administrative data and tax information.
The launch of this program comes after nine years of lobbying by metropolitan municipalities for access to national administrative data to help them understand their local economies.
According to Godongwana, the data obtained through SEAD-SA will assist the government in creating policies and making better investment decisions.
Given the current challenges faced by South Africa, such as fiscal risks, low economic growth, high unemployment, and structural economic constraints, this data will provide valuable insights and clear directions for policymaking.
Furthermore, Godongwana emphasized that the country’s metropolitan areas play a crucial role in generating employment.
However, the data reveals that many of the top 30 industrial areas in these metros have experienced job losses since 2014.
Factors such as land governance, service delivery, business safety, and urban management failures negatively impact publicly-owned industrial spaces.
Consequently, the government’s investments in these areas often fail to yield satisfactory returns due to these constraints.
Godongwana highlighted the significance of metros and their industries in the national, regional, and global value chains.
The collapse or significant decline of a metro could have severe consequences for specific industries and the country as a whole.