Finance Minister Nhlanhla Nene said government expected growth to reach three per cent in 2017 due to fiscal measures expected to be implemented.
“This is a call to action for all of us to work together in rebuilding the fiscal space required to take the country to a growth path,” said Nene.
During the Medium Term Budget Policy Statement (MTBPS) address, Nene added the country will have to implement fiscal measures to build future investment.
He said the country was operating in a very constrained fiscal environment and this required discipline.
The country’s economic growth has partly been affected by wildcat strikes in the platinum industry and by the metalworkers’ labour action protest last winter.
“The downward revision [in economic growth] is partly because of a weak global environment, including the slowdown in Europe, China and other emerging economies,” added Nene.
He bemoaned the lack of the much required progress in addressing the country’s triple challenges of poverty reduction, unemployment and inequality.
“We have achieved much over the past 20 years as we expanded education and healthcare,” he said.
“But we are not making enough progress in raising incomes or reducing poverty. Far too many people are unemployed, which deepens inequality and heightens vulnerability.”
Nene said the MTBPS was focused on restoring balance to the nation’s finances, bolstering investment and achieving better value for money in public expenditure.
He further said the country was supposed to improve its export performance and shift away from consumption-led, debt-reliant expansion.
Presenting his maiden MTBPS, Nene highlighted the need for a pact between a capable developmental state, a thriving business sector and a strong civil society.
Nene called for better links between emerging farmers and produce markets as necessities in accompanying an improved alignment between land reform and agriculture support programmes.
“In manufacturing, we are helping companies to enhance their competitiveness and upgrade equipment through the industrial policy action plan.”