President Cyril Ramaphosa. Picture: GCIS
President Cyril Ramaphosa. Picture: GCIS

The significant drop in the country’s GDP is an anomaly due to the Covid-19 lockdown, but it should spur South Africans on to do all they can to help rebuild the economy, President Cyril Ramaphosa said. 

This was after Stats SA revealed on Tuesday that the economy shrank at an annualised rate of 51% during the second quarter, the worst quarterly collapse on record. If the second-quarter results are not annualised, GDP contracted by 16.4%.

SA went into complete lockdown in March, shutting down the majority of the already weak economy except for essential services. The risk-adjusted strategy used to curb the spread of the coronavirus has gradually been eased with the country moving to level 2 last month, which finally saw most the economy reopened. 

Early in the lockdown, the government announced a R500bn economic and social relief package to help those affected. Many of the schemes, however, have been marred by controversy and allegations of fraud and mismanagement.  

Ramaphosa said having acted “swiftly and decisively to save lives” and bring the pandemic under control, the government’s focus is now on economic recovery.

“Now is the time to act quickly and boldly to place SA on a rapid growth trajectory,” he said. “We cannot continue with business as usual. We will use this moment of crisis to build a new economy, and unleash SA’s true potential.”

The president said there are three processes underway to support economic recovery.

Social partners will soon present a social compact on economic recovery to Ramaphosa following discussions at the National Economic Development and Labour Council. He said this social compact identifies areas of convergence, and provides a basis for action by all partners.

The government will thereafter finalise its economic recovery strategy, which will draw on this social compact and “outline a clear, action-orientated plan to stimulate economic growth and enable a rapid rebound”.

Ramaphosa said the strategy will include fast-tracking urgent structural reforms, expanding employment programmes, facilitating large-scale investment in infrastructure projects, and implementing measures to promote localisation as well as enhancing regional and continental trade.

He said the presidential employment stimulus will begin implementation within the next month, and will expand opportunities through public and social employment to counteract job losses.

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