A steady 1.3% GDP growth projected for S.A, but still not sufficient says Finance Minister

PUBLISHED: Wed, 22 Feb 2017 11:28:49 GMT

 The South African economy is expected to grow by 1.3 per cent in 2017 and 2 per cent in 2018 as economic conditions strengthen.

This is the estimate from South Africa’s Finance Minister, Pravin Gordhan, as he tabled the country’s budget for 2017 in parliament Wednesday afternoon.

South Africa’s economy grew by an estimated 0.5 per cent in the previous year.

Factors supporting the projected 1.3 per cent growth include marginally higher global growth, stabilizing commodity prices, greater reliability of the electricity network, favourable weather conditions, recovering business and consumer confidence, and improved labour relations says the minister.

“But the projected rate of growth is not sufficient to reduce unemployment or impact significantly on poverty and inequality. It falls well short of our NDP goals,” says Gordhan.

The Finance Minister went on to highlight the following imperatives needed to boost investment in the short term:

–          Finalising legislation relating to mining development and land redistribution.

–          Implementing the transition from analogue to digital television, which will release spectrum for broadband services.

–          Continuing the independent power producer programme, both in renewable and to take advantage of gas investment opportunities.

–          Further strengthening of economic regulatory functions and streamlining investment approval processes.

–          Production-friendly industrial relations and prompt resolution of disputes.

–          An enabling environment for small enterprises and support through leveraging both public and private sector procurement budgets.

–          Focused support on labour-intensive sectors =, including agriculture, agro-processing and tourism-related services.

–          Strengthening regional ties and trade links.

–          Safeguarding South Africa’s investment-grade credit rating.

Minister Gordhan further added that Treasury knows what to do to get out of the present low growth trap.

“If lions work as a team they will bring down even a buffalo.”

Sign Up for Our Newsletter Daily Update
Get the best of CNBC Africa sent straight to your inbox with breaking business news, insights and updates from experts across the continent.
Get this delivered to your inbox, and more info about about our products and services. By signing up for newsletters, you are agreeing to our Terms of Use and Privacy Policy.