Government’s New Growth Path (NGP), unveiled late last year, does not speak to the issues that would boost real economic growth, Rand Merchant Bank economist Rudolf Gouws said on Wednesday.

Gouws, who was addressing a Gordon Institute of Business Science economic outlook conference in Johannesburg, said that Economic Development Minister Ebrahim Patel’s plan was not really a map to growing an economy, but rather a “reactionary jobs plan”.

The plan aims to create five-million jobs in the next ten years in strategic areas of the economy.

But Gouws stressed the NGP was focusing too much on creating jobs through State intervention, rather than promoting a more enabling business environment.

Econometrix chief economist Azar Jammine agreed, saying that if South Africa wanted to achieve the NGP target of creating another half a million jobs every year until 2020, it would need to place much greater emphasis on attracting large scale foreign investment and creating an enabling environment for local and foreign businesses.

Foreign direct investment (FDI) slumped 87% to $1,3-billion in 2010, a United Nations report calculated last week.

Jammine said that decline in FDI flow could be linked to South Africa’s lack of productivity, owing to the degradation of the country’s education and training system, together with the threatening monopolistic-like union movement.

He also said that a large concentration of business was in corporate hands and that not enough small businesses and entrepreneurs were being encouraged to thrive.

Harvard Kennedy School’s Eric Kacou pointed out that currently South Africa only showed entrepreneurial activity of about 5%.

He said that while the NGP tried to tackle the high levels of unemployment, it did not cover structural problems that were needed to transform the South African landscape.

The NGP is South Africa’s fourth economic plan that has been released in the past 16 years, yet 25% of the workforce is unemployed.

The economy shed one-million jobs since the beginning of 2009.