President Cyril Ramaphosa says that South Africa is beginning to show signs of economic recovery after the country was deeply damaged by the Covid-19 pandemic.
Writing in his weekly letter to the public, the president cited data from the South African Revenue Service (SARS) which shows that the country recorded yet another record trade surplus in May, to the value of R54.6 billion.
The trade surplus is primarily driven by mineral and precious metal exports as well as exports of vehicle and transport equipment, chemical products and agricultural products, he said.
“High commodity prices and rising global demand is good for our economy, particularly the mining sector. Rising global metals prices will play a significant role in accelerating our recovery from the pandemic downturn.
“In addition, they open up a host of new opportunities in the mining value chain, boosting the fortunes of the mines themselves and with them the suppliers of capital goods and the options for beneficiation.”
Ramaphosa said that mining has always had a dual role in our economy and society.
“On the one hand, mining contributes over half of our goods exports, around 10% of GDP and 5% of employment. It is a pillar of our capital goods industry. It is not a coincidence that when global metals prices peak, our economy and job creation also surge.”
On the other hand, mining has historically been central to South Africa’s deep inequalities, he said.
“Ownership is concentrated in a few huge companies, while workplaces, pay-scales and communities around the mines are still largely shaped by discriminatory relationships established under apartheid.”
Ramaphosa said that the challenge is to benefit from the mining boom while laying the groundwork for more diversified, inclusive and environmentally sustainable growth.
“In constant dollar terms, prices for most of our metals exports – led by platinum, gold and iron ore – are now as high as they were at the peak of the last commodity boom in 2011.
“These prices have helped sustain the economy despite the sharp decline in the hospitality and tourism industries. As a result, our growth has recovered far better than we thought possible in the bleak days of last April, although employment creation is still far behind.
“Now is the time to facilitate investment along the mining value chain to promote broader job creation, small business development and growth in dynamic new industries.”