DigiMag Glacier_Q4_2017 - Page 7

Decisive action required Scenario 3 Productivity-Enhancing • Overall real GDP rises to 5.3%, above the target of 5% as set out in the National Development Plan • The economy’s size more than doubles between 2015 and 2030 and is 25% larger than in the Business as Usual scenario • Savings as a share of GDP is 20.8% in 2030, which allows SA to reap a somewhat higher dividend from its large working-age population. Scenario 4 Accelerated Educational Attainment • Scenario is identical to Productivity- Enhancing except that the working-age population with at least nine years of schooling rises from 68% to 72% by 2030 • Savings as a share of GDP rise to 21% by 2030 • Overall real GDP and real GDP per capita rise at an average of 5.4% and 4.8% per annum, respectively. 3. World Bank, 2015. South Africa Economic Update: Jobs and South Africa’s changing demographics. Washington, DC: The World Bank. http://documents. worldbank.org/curated/en/479161467998767997/ South-Africa-economic-update-jobs-and-South- Africa-s-changing-demographics The World Bank concludes that with almost 70% of the South African population currently of working age (15 to 64 years), the country is experiencing a demographic dividend with the window of opportunity for rapid economic growth wide open. This window is likely to remain open for the next 50 to 60 years, but as a result of high unemployment levels, especially among young people, and a serious lack of job creation and skills development, South Africa has not been successful in capitalising on its demographic dividend so far. Between 2000 and 2016, about 9.9 million people were added to the working-age population of whom only 37% found jobs. Another 9 million could be added to the working-age population between now and 2050. In the next 15 years alone, the working-age population is expected to expand by 280 000 per annum. ‘These people will have to find productive jobs if South Africa is to harvest the potential boost to growth and living standards before it faces the rising burden associated with a rapidly growing elderly population.’ (World Bank, 2015:5). However, as the World Bank scenarios show, simply increasing the number of jobs won’t be sufficient to allow South Africa to boost savings. ‘More job-intensive growth needs to be accompanied by improving the quality of education so that better educated youth are entering the workforce,’ it reports. ‘This needs to be complemented by efforts to improve the productivity of existing workers and the unemployed through better skills development and training.’ (World Bank, 2015:47).