South Africa staff report for the 2018 Article IV consultation

The International Monetary Fund (IMF) has published the outcome of its Article IV consultation with South Africa that took place between 28 May and 11 June 2018. The outcome of the visit is summarised in an Article IV Report. The National Treasury's Media Release of 30 July states that "The IMF acknowledges that South Africa’s economy remains well integrated in the global economy, diversified and has a sophisticated financial services sector. The IMF has welcomed ongoing initiatives to further buttress financial sector stability, including the new Financial Sector Regulation Act that lays the foundations of the Twin Peaks model of financial regulation. In addition, the IMF notes that strong institutions and a young workforce will contribute to higher growth potential. 
 
However, several impediments to growth are highlighted, including policy uncertainty and regulatory overreach that hinders private investment, inefficiencies in SOEs, labour market rigidities, insufficient competition in product markets and corruption. While the IMF acknowledges South Africa’s recent reform efforts to combat corruption, they argue that to improve growth and reduce poverty, these actions have to be followed by strict enforcement of good regulations. In addition, clear communication of policies and regulatory decisions is essential to clarify any uncertainty that is weighing on investor sentiment."