The South African government will finalise a clear economic growth strategy within the next few weeks, President Cyril Ramaphosa said on Monday, as the country aims to boost confidence in an economy facing lower growth and job cuts.
Investor confidence in Africa’s most industrialised economy is fragile, with the economic growth outlook clouded by a lack of clarity and progress on reforms.
In the first of his weekly messages to the nation known as “From the Desk of the President”, Ramaphosa said after a decade of low growth and deepening poverty, people were looking for signs of progress.
He said the economy would this year record growth that was lower than expected and much lower than what the country needed, while government finances were stretched about as far as they can go, and several industries were looking at cutting jobs.
Last week, miner Sibanye-Stillwater said it planned to cut around 5,270 jobs as it restructures its loss-making Marikana operations that it acquired this year.
“Building on the stimulus and recovery plan, government will finalise a clear economic growth strategy within the next few weeks,” Ramaphosa said, in reference to a strategy that includes restructuring state owned enterprises such as power utility Eskom and the establishment of an infrastructure fund.
Without giving specifics of his plan, Ramaphosa said the work was “taking place at a time when government’s finances are under great strain, and there is very little room to increase spending or borrowing”.
This, therefore, means the government needed to spend resources more smartly, get rid of wastage and shift more resources to infrastructure investment, Ramaphosa said.
Finance Minister Tito Mboweni said this month that South Africa’s economic growth was unlikely to reach the treasury’s target of 1.5% in 2019 because conditions had changed and the country was facing increasing headwinds.