allowing for private sector participation in the electricity sector since 2010 has enabled the connection of 3776mw6 to the electricity grid and increased private sector investment, and minimised the negative impact of 5 independent communications authority of south africa ( icasa ). 2018. third report on the state of the ict sector in south africa. pretoria, icasa. 6 department of energy. 2018. opinion piece by minister jeff radebe, ‘ renewable energy independent power producer agreements will benefit south africa in the transition to an environmentally sustainable economic future ’, 27 july. page 4 of 12 power shortages in 2015 / 16. there is room for more reforms which, as articulated in the ndp, can lower the cost of living and improve the competitiveness of our exports. indeed, national treasury has recently estimated that the potential growth rate of the economy could be doubled by, among other things, releasing broadband spectrum, increasing the skill levels in the economy, and addressing anti - competitive practices. 7 other analyses show that there is a positive correlation between the employment of skilled workers and unskilled workers. in this regard, measures to increase the number of workers with critical skills, including higher university throughput, the training of artisans and easing visa regulations for individuals with critical skills, could be beneficial. while some of these reforms will take time to show in the growth numbers, 8 more immediate gains can be achieved by addressing the policy uncertainty that has constrained private investment for some time now. in fact, providing a clear and consistent message about the reform agenda will be as important as the agenda itself. former united states ( us ) treasury secretary larry summers has often been quoted as saying that ‘ confidence is the cheapest form of stimulus ’. 9 however, in an environment of rising inflation and fiscal constraints, it is also likely to be the most effective stimulus currently available. in this regard, further clarity on the modalities of the recovery package recently announced by the president will be important. over the medium term, it is important to emphasise that while the rate of growth in the economy is set to rise only gradually, with a faster uptick contingent upon further reforms, south africa ’ s macroeconomic framework and strong set of institutions continue to display remarkable resilience under challenging conditions. this is no accident. south africa ’ s constitution was carefully drafted to provide for an independent judiciary, free media and democratic accountability – all of which are underpinned by an active civil society. meanwhile, the macroeconomic framework has

. the tools necessary for addressing system - wide risks are commonly known as macroprudential tools. since the global financial crisis, it has become apparent that even if individual financial institutions appear sound, there may still be a risk of broader financial instability due to either excess leverage across the system or a high degree of common exposures to a particular risk. thus, the microprudential tools that have commonly been used to safeguard individual banks, such as minimum capital and liquidity ratios, need to be supplemented with a macroprudential approach to regulation. the sarb is currently researching a variety of potential macroprudential tools and financial stability risk indicators to improve the resilience of the broader financial system. the sarb ’ s financial stability committee has been set up to protect and enhance financial stability. it is tasked with considering qualitative assessments of the conjunctural assessments of risks to, and imbalances in, the broad financial system and formulating policy action to mitigate identified threats, as well as considering the appropriateness and adequacy of resolution policies and measures for crisis management. the sarb ’ s toolkit is continually being refined and includes the ability to deploy a countercyclical capital buffer for banks. this provides the sarb with the means to raise aggregate bank capital buffers during upswings in the financial cycle, and allows for the release of these buffers during downswings. currently, given the modest level of credit growth, the countercyclical capital buffer is set at zero. the fsr act has also established a twin peaks approach to financial regulation, which means that prudential and market conduct regulation are now managed by two separate entities. the sarb, as the prudential regulator, has received expanded oversight responsibilities extending beyond banks, to include insurers and financial market infrastructures. meanwhile, a new entity, called the financial sector conduct page 9 of 12 authority, has been established as the market conduct regulator. the fsr act meaningfully builds on south africa ’ s institutional strength within the financial sector by ensuring that the regulatory architecture is in line with best practices globally. in particular, establishing a clear separation between prudential and conduct regulation is an important reform because it ensures that there is adequate oversight of both the soundness of financial institutions and the fair treatment of clients. over the longer term, we believe that centralising financial regulation within the sarb will generate economies of scale and improve our ability to