Enhanced infrastructural development, the implementation of education and skills development programmes which deliver the skills necessary for a modern economy, and careful land and agriculture reform, greater infusion of technology in the economy, and labour market reforms are some of the most important prerequisites for boosting economic performance and employment creation. The macroeconomic policy setting is appropriate.
It is far easier to look for a quick fix such as monetary policy. This is not a peculiar South African phenomenon, however. Monetary policies, in conjunction with fiscal policies, were instrumental in avoiding worse outcomes to the global financial crisis. But monetary policy is not the appropriate policy to raise potential output.