President Cyril Ramaphosa says government will intensify efforts to grow the economy, create jobs and attract investment, despite growing global uncertainties that threaten South Africa’s economic recovery.
Delivering the Presidency Budget Vote in the National Assembly on Tuesday, President Ramaphosa said the Presidency remains focused on driving inclusive growth and job creation, reducing poverty and the cost of living, and building a capable and ethical State.
The President said South Africa’s economic outlook has improved following years of challenges.
“Following years of challenges, our economy is on the mend. The macroeconomic environment has improved, tax collection revenues remain strong, public finances are in better shape and national debt has stabilised,” President Ramaphosa told Parliament.
He highlighted recent improvements in South Africa’s international credit outlook, noting that ratings agency Moody’s recently upgraded the country’s outlook from stable to positive, while S&P had lifted South Africa’s credit rating for the first time in two decades.
President Ramaphosa said the Presidency continues to coordinate the national investment drive and has secured substantial commitments through the South Africa Investment Conference.
“In March, we held a successful 6th South Africa Investment Conference, where we secured pledges in excess of R890 billion in industries across the economy,” he said.
He welcomed the strong participation of domestic investors.
“Significantly, a substantial portion of investment commitments were from domestic investors. When local investors show confidence in the prospects of the economy, international investors follow suit,” he said.
President Ramaphosa stressed that economic growth should ultimately improve the lives of citizens.
“Economic growth is not an end in itself. Its purpose is to create work, restore hope and expand opportunity. Every investment secured, every infrastructure project completed and every reform implemented must ultimately improve the lives of ordinary South Africans,” he said.
The President said government had embarked on what he described as the largest infrastructure build programme in the country’s history.
“Over the next three years, the State will be investing R1 trillion in building and refurbishing roads, dams, schools, hospitals and clinics, as well as energy, logistics and transportation infrastructure,” the President said.
Government is also working to protect jobs in distressed sectors, including the automotive, cement and steel industries, while expanding export markets for South African products.
President Ramaphosa pointed to improvements in energy security as one of government’s major achievements.
“Through the National Energy Crisis Committee – and thanks to the efforts of Eskom, government departments and social partners – the country has recorded more than a year without load shedding,” the President said.
He said Eskom has returned to financial and operational viability and that additional electricity generation capacity continues to be added to the national grid.
The President also cited improvements in logistics through reforms at Transnet, saying better performance at ports and on rail networks is helping to ease bottlenecks affecting mining, agriculture and manufacturing.
Agriculture remains a key growth sector, he said.
“For example, between January and March this year, agriculture recorded an 11% increase in export earnings, compared to the same period last year,” he said.
President Ramaphosa further announced a major land reform initiative aimed at strengthening the position of black farmers.
“As part of our efforts to revitalise rural economies, to strengthen land rights and support the inclusion of black farmers in commercial agriculture, we have embarked on a concerted programme to release this land with title deeds to deserving beneficiaries,” he said.
He added that the Minister of Land Reform and Rural Development would provide details of plans to convert agricultural leases into title deeds.
Tourism on the rise
Tourism is also showing strong growth, with South Africa recording 10.5 million international tourist arrivals last year, the highest on record.
However, the President warned that escalating conflict in the Middle East could undermine economic gains.
“The attack by the United States and Israel on Iran – and the conflict that has now engulfed much of the region – has set off a global oil crisis,” President Ramaphosa said.
He said rising oil and fertiliser prices were likely to place pressure on inflation and increase the cost of living.
“The effects of the surge in oil prices – and of other critical supplies like fertiliser – are likely to undermine much of the progress we had made in bringing down inflation and the cost of living,” the President said.
President Ramaphosa cautioned that economic conditions were likely to remain difficult in the short-term, particularly as recent labour market data shows a decline in employment.
“We know from experience that it often takes time for investment to translate into economic growth, and for growth to translate into jobs. But we must still be deeply concerned about the decline in employment, because it is about people’s lives and livelihoods,” he said.
The President said these challenges underscore the urgency of implementing government’s economic reform agenda and accelerating measures aimed at creating jobs and stimulating growth. – SAnews.gov.za
