South Africa’s National Treasury is set to allocate over R44 billion in the Medium Term Economic Framework (MTEF) to support economic growth in various programmes.
This was In Finance Minister Pravin Gordhan’s speech, tabled to parliament in Cape Town on Wednesday where he urged co-operation from society as a whole.
“Progress in engagements between government, the business sector and social stakeholders is imperative,” says Gordhan.
The funds allocated to the MTEF period are as follows:
– R3.9 billion for small, medium and micro enterprises and cooperatives.
– R4.2 billion for industrial infrastructure in special economic zones and industrial parks.
– R1.9 billion for broadband implementation.
– R3.9 billion for Scientific and Industrial Research.
– An additional R494 million for tourism promotion.
– An additional R266 million to support the aquaculture sector and realise the goals of the Oceans Economy Phakisa Operation.
– Spending on agriculture, rural development and land reform amounting to nearly R30 billion by 2019/20.
“Effective implementation of these and other programmes and initiatives will set us on a higher growth trajectory than currently projected,” says Gordhan.
The Finance Minister expects higher growth in the coming year. He went on to highlight South Africa’s current economic state and challenges:
– The services sector was the main contributor to growth in 2016, bringing nearly 120 000 new working opportunities.
– Mining continued to underperform while manufacturing output was supported by buoyant sales in petrochemicals, food and beverages and motor vehicles. Mining and manufacturing employment declined by 8 000 jobs in 2016.
– Weak business confidence and low levels of profitability weighed on investment across all sectors.
– Though the policy interest rate has increased by 2 percentage points since 2014, inflation ended the year above the target, with food prices continuing to reflect the impact on agriculture of poor rainfall.
– Lower growth in our trading partners in Africa and elsewhere has contributed to sluggish export earnings.