SA’s 2017 growth projection of 1.3% may not be realised, Finance Minister Malusi Gigaba said in a speech today.
“This continues the trend of low growth over the last several years, undermining our progress in significantly reducing inequality, unemployment and poverty which fundamentally disadvantages a large portion of our population, and is the cause of social instability. It therefore requires all social partners to reflect on our progress in bringing about inclusive growth and economic transformation, and to do all that we can and more, from our respective positions.”
In reference to SA’s recent downgrades, the Minister added that all three credit ratings agencies raised similar issues such as: the slow pace of growth-enhancing reforms; growing contingent liabilities amid poor governance at key SOCs; and political risks, among other issues.
“Our sovereign credit rating has huge macroeconomic impact, and affects government, business, and ordinary South Africans alike. We are committed to restoring it to a favourable investment grade rating with a positive outlook as quickly as possible. However, we should not lose sight of the fact that we need to address the issues they raise, first and foremost for the good of our country and to advance our national development.
“We need to want to do the right things for our economy and our society, not just because credit ratings agencies are watching. Obviously these developments are not what we would have hoped, however it is critical that we are not despondent at this time.”
Minister Gigaba said he’d cancelled his trip to Germany this week where he was to attend the G20 Africa Partnership Conference, because he felt it was critical to ensure that he responded appropriately to the disappointing economic performance of Q1.
“Government has been deeply engaged with the issue of the recession, analysing its impact on our growth target, and considering an appropriate response. We discussed it in depth in Cabinet last week. President Zuma convened an urgent meeting with several Ministers last night where we discussed critical interventions which need to be taken. The President has stressed the urgency of a coordinated response, and is convening a full day meeting in two weeks, of various economic cluster and Ministers responsible for key sectors, to address obstacles delaying the finalization of policy processes and agree urgent timelines.”