South Africa to unveil action plan to lift growth: Gigaba

PUBLISHED: Mon, 03 Jul 2017 11:11:56 GMT

South Africa’s Treasury will unveil an action plan on Friday detailing structural changes and timelines to boost growth to 6 percent in an economy mired in recession, Finance Minister Malusi Gigaba said on Monday.

The plan will be released after a policy conference of the ruling African National Congress (ANC) wraps up, a meeting overshadowed by a power struggle between rivals seeking to succeed President Jacob Zuma.

“We will implement steps to get the economy growing at about 6 percent and more”, Gigaba said at an event marking the launch of the tax-filing season in Africa’s most industrialised economy.

“We want to get everyone focused on boosting the economy … so that the low growth doesn’t become a vicious cycle.”

South Africa’s economy contracted 0.7 percent in the first three months of 2017 after shrinking 0.3 percent in the previous quarter, piling pressure on Zuma whose missteps, including the sacking of Gigaba’s highly-respected predecessor Pravin Gordhan in March, have corroded investor confidence.

Proposals being debated at the ANC’s conference which have unnerved investors include holding a referendum on land reform and a push for the expropriation of land without compensation and greater black ownership of businesses.

But Gigaba pointedly said the action plan would draw on issues raised by investors and ratings agencies.

South Africa’s credit rating was recently downgraded by S&P Global Ratings and Fitch to junk status.

South African Revenue Service (SARS) commissioner Tom Moyane said at the same event as Gigaba that he was confident of reaching the 1.62 trillion rand ($124 billion) revenue target set out in the February budget despite the recession.

“We have scanned the horizon and seen that companies are already shedding jobs … But we are confident of reaching our target,” Moyane said.

($1 = 13.0605 rand)

(Reporting by Mfuneko Toyana; Writing by Ed Stoddard; Editing by)

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