Finance minister Malusi Gigaba says that, despite three ratings downgrades and an official move into recession, South African citizens, businesses and stakeholders should think positively, and make way for economic transformation.
At a media briefing on Thursday, the finance minister said that government was fully aware of the economic trials in South Africa, but was adamant that its interventions would show positive results in time.
“Successful government interventions include having moved from electricity shortage to surplus, and launching Invest SA, making it easy to open a business and invest in South Africa,” Gigaba said.
“These interventions have resolved issues which until very recently has been seen as major binding constraints on growth.
“The rebound however, will not be immediate. Production capacity which was lost due to electricity unavailability or bitter labour disagreements will take time to be reconstituted,” he said.
He pointed to a recovery in South Africa’s mining and agricultural sectors as a very good sign, as both sectors – major GDP contributors – had had the biggest impact on the country’s slow growth over the past few years.
More challenging would be restoring consumer and business confidence, the minister said. Here, he called for South Africans at large to focus on the positive and not give in to negative thinking.
“We can’t say how much growth can be restored if all social partners begin to talk up what is working in the economy, but we know for sure that fixating on our challenges will not help us.
“So we call on everyone in South Africa, business and all social partners, across all political affiliations, to focus on working together to drive inclusive growth,” Gigaba said.
More specific interventions and focuses will be in the following areas:
- Maintaining the fiscal framework and stability of National Treasury – investors and credit ratings have questioned whether Treasury was committed to a strict fiscal framework – Gigaba has assured that it is.
- Policy certainty – Gigaba said Cabinet will need to conclude unfinished policy discussions – but most clarity and certainty will come after the ANC’s policy conferences.
- Stabilising state-owned companies – Gigaba said that, as stakeholders, government through National Treasury will ensure that vacancies in SOEs like SAA and Eskom will be filled.
- Inclusive growth and economic transformation – Gigaba said that these remain a priority for government. They want business to expand in South Africa and also transform, to include black and female ownership and in top management. It is not optional, Gigaba said.
To meet these targets, Gigaba said government will work with the financial sector and fast-track consultation on the Public Procurement Bill, making R500 billion in procurement open to its transformation goals.
“We are all frustrated by the lack of growth which if sustained, will compromise our ability to rapidly reduce unemployment, poverty and inequality,” he said.
“The National Development Plan set our nation the task of driving inclusive growth and economic transformation as two necessary, mutually reinforcing and overarching objectives which enable us to resolve our national challenges.”
“Nowhere in the NDP does it say it would be easy.”