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By Lameez Omarjee, Fin24
Johannesburg – Finance Minister Gigaba unveiled a 14-point action plan to revive the economy on Thursday.
Gigaba announced the details of the inclusive growth economic action plan at the JSE, following engagements with various stakeholders.
These structural reforms are related to the nine-point plan to support business and consumer confidence for the economy’s foundation.
The plan comes after a meeting with President Jacob Zuma and several ministers on June 28. Each action plan has a minister assigned to it as well as a deadline. Further details will be unpacked at the mini budget in October.
The areas to be addressed include state-owned enterprises, with South African Airways being an action plan on its own. The Mining Charter, telecommunications, public procurement and fiscal policy are also other areas.
Gigaba, who spoke at the Thomson Reuters award earlier, noted that the country’s economy is in a technical recession, having contracted for a second consecutive quarter. Lower-than-expected growth is likely. He added that tough decisions will be made in the medium-term budget. The growth target is still set at 1.3%.
“The economy is strained, we must brace ourselves for tough times ahead,” he said. He encouraged South Africans to work together to restore growth.
He reiterated previous statements that achieving economic transformation would remain a priority and is at the heart of the plan.
He also said that government would remain within the fiscal framework to achieve such objectives.
Old Mutual Investment Group economic strategist Rian le Roux previously said an improvement in confidence levels is needed to boost the economy. In 1994, when the economy was “deeply depressed”, a boost in confidence levels led to a surge in business investment, he explained to reporters on Wednesday.
The investment strike could be extended if there is no improvement in confidence levels soon enough, he added.
Le Roux said positive activity in different sectors such as agriculture and mining suggests that the economy may be out of recession already. Tracking of second-quarter GDP growth shows figures above 2%, in contrast to the -0.3% contraction reported in the first quarter.