JOHANNESBURG - The Centre for Development and Enterprise (CDE) warns the country could soon run out of money.
The organisation says public sector wages and sector education and training authorities are draining the fiscus.
According to the center’s executive director, Ann Bernstein, South Africa has had a very low growth rate over the past 15 years while reckless economic policies have worsened the financial situation.
"We are now sitting in a situation where we cannot continue as we have. We need to cut down on government expenditure. Just like any household we have to make some changes and this must be done in a way that will promote growth," Bernstein said.
Supporting her argument, in a statement in February, the CDE highlighted key areas where government's spending is grossly inefficient, including:
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In response to this, the CDE proposed several solutions to cutting costs and restoring financial stability.
Among the recommendations is withdrawing from its public sector wage agreement of 5.5% and implementing a 3.5 % increase instead.
This, according to CDE, would save R100-billion over the next three years.
Another solution is to review payrolls to identify and eliminate ‘ghost workers’ drawing public sector salaries.
While cutting expenditure on its own will not resolve the crisis, the CDE said the GNU has to get serious about growth.