Policy uncertainty, energy challenges and limited fiscal space are holding back economic growth in South Africa according to the latest United Nations World Economic Situation and Prospects report.

The UN expects the South African economy to grow by 0.9% this year, in line with expectations by the International Monetary Fund and the World Bank. The UN says South Africa needs higher growth that is matched by increased employment.

It says the country needs fiscal consolidation and proper management of debt to increase the tax base as well as build a strong and trustworthy rule of law.

“ There are a number of downside risks in the SA economy, starting with policy uncertainty, uncertainty with land rights, the business sentiments is very low resulting in weak investments. If the business sentiments are weak we will see poor job performance, therefore, poor taxes,” says Plus Economics’ Kisten Thompson.