Gordhan remains upbeat about economy
'We've come a long way, no other country has accomplished what we have in such a short time'
FINANCE Minister, Pravin Gordhan on Friday affirmed his confidence in South Africa’s ability to overcome the current economic turmoil and pointed out the way forward.
‘We have hope for the future, want to see growth, have security and enjoy good prospects,’ he said, speaking to district officials and business people at a business breakfast hosted by the uThungulu Municipality.
‘We might have a noisy democracy, but we have shown remarkable stability.’
Alongside the MEC for Human Settlements and Public Works, Ravi Pillay, uThungulu District Mayor Thembeka Mchunu and uMhlathuze Mayor Mdu Mholongo, Gordhan highlighted the country’s successes and emphasised that no one would be excluded from participating in government’s upcoming strategies.
‘We’ve come a long way. No other country has accomplished what we have in such a short time,’ he said.
‘A big complaint is that the benefits of growth don’t filter down past the wealthy sectors. We are aiming for inclusive growth to narrow the inequity gap and combat the tough times so everyone can benefit.’
He said South Africa’s economy faced two main problems according to the International Monetary Fund (IMF) – lack of competition which prevents SMMEs from growing and spatial integration, wherein workplaces and homes were situated too far apart from each other.
Gordhan stressed the importance of medium-sized businesses in generating new ideas and innovations, and the creation of many more small businesses which will be prioritised over the next five to 10 years.
Local municipalities would need to do a lot more to support small businesses in their regions.
Mayor Mchunu noted the district’s growing population with concern, as an influx of people looking for job opportunities created more pressure.
He also hailed the success of its fresh produce market initiative, which is now supplying 628 schools with fresh produce grown by emerging farmers.
MEC Pillay confirmed government’s plans to provide significant stimulation in the agricultural sector, adding that state consumers would also be pulled in to sustain SMME growth, while Gordhan noted the sector’s huge investment potential.
Touching on the issue of the country’s investment grade rating, Gordhan said government borrows R11-billion every week, and debt could soon reach R2-trillion.
However, South Africa avoided the mistakes of other African countries which have landed in financial trouble over last year by limiting the amount of foreign currency borrowed to 10 percent.
Plans to fast-track the implementation of the Invest SA initiative, a one-stop investment shop to assist investors in meeting all the necessary legislative and regulatory requirements, are also being processed.
‘We face big challenges with the rating agencies, but we can overcome them. We need to take action over the next six months ahead of our next rating at the end of the year. Once we have dealt with that issue, we can move on to boost our economy further,’ he said.
‘We need to have confidence in ourselves and in our own economy. We can’t expect investors to invest and look to our economy with confidence when we are not investing and don’t have confidence in ourselves.’
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