South Africa’s economic powerhouse Gauteng is forecast to grow by only 0.8% this year, said officials from the province’s Treasury department on Tuesday.<\/p>\n
Despite the low growth rate, officials said the province is still outperforming the national economy\u2019s growth which is projected at 0.5%.<\/p>\n
This is according to Gauteng MEC of Finance Barbara Creecy, who presented the province’s medium-term budget policy statement to the Parliamentary portfolio committee on Tuesday.<\/p>\n
\u201cWe are expecting the Gauteng economy to perform above the national economy,\u201d said Creecy.<\/p>\n
Economic growth in Gauteng has been falling in recent years, when considering the province’s previous mini budget announcements.<\/p>\n
In last year’s mini budget, Gauteng officials expected the province’s gross domestic product to be 1.8% for 2015 and 2014.<\/p>\n
Gauteng’s GDP growth was recorded at 3.3% in 2010 and 3.5% in 2011, according to the province’s 2015 medium-term budget policy statement.<\/p>\n
But in her 2016 mini budget speech on Tuesday, Creecy spoke of headwinds facing the global economy.<\/p>\n
These include that “global economic growth patterns have not stabilised from the 2008 financial crisis”, Africa’s economic growth is expected to fall to 1.4% this year and “low commodity prices and lack of diversity in many economies (which) deter investors”.<\/p>\n
However, quarterly data indicates econmic activity in Gauteng is picking up.<\/p>\n
Data from the second quarter also showed an improvement in growth to 2.9%, up from 0.1% reported in the first quarter.<\/p>\n
The main drivers for this recovery were the manufacturing sector which recorded 8.1% growth, the finance and business sector (3.3% growth), the agriculture sector (3.2% growth) and transport (2.8% growth).<\/p>\n
Given the low base from which the manufacturing and finance and business sectors grew, Creecy highlighted year-on-year growth for manufacturing at 2.6% and 2.7% for finance and business services.<\/p>\n
The number of people employed by the province had grown to 5 million between 2010 and 2015. The top five sectors contributing to this growth include manufacturing, transport, finance as well as business services, and trade and community services.<\/p>\n
\u201cThose sectors last year contributed significantly to fact that we created a quarter of a million [250 000] jobs last year,\u201d she said.<\/p>\n
In the first two quarters of 2016, 47,000 net jobs were created in Gauteng, Creecy added.<\/p>\n
Gauteng premier David Makhura is currently putting together sectoral committees involving business and government to find ways 11 key sectors can \u201cunlock the potential\u201d to drive the economy.<\/p>\n
Small businesses also contribute to economic growth.<\/p>\n
\u201cAbout 45% of small businesses in the country are located in this province,\u201d said Creecy.<\/p>\n
Gauteng’s provincial government has committed to spending 30% of its goods and services budget on procuring goods and services from township suppliers.<\/p>\n
The targeted spend of 18% was exceeded at the end of the second quarter and is currently at 23%, said Creecy. Spend is now over R6.8bn, as government has used over 1 600 township suppliers.<\/p>\n
\u201cOver last two-and-a-half years we have generated R13.5bn in revenue\u2026 I am satisfied with our own revenue generation, given the fact we are in tough economic times,\u201d she said.<\/p>\n