Inclusive economic growth is SA’s greatest priority, says Ramaphosa

President Cyril Ramaphosa has hailed collaborative efforts by government, business and labour to address bottlenecks in SA’s struggling economy which is battling severe fiscal constraints, load-shedding, unemployment and low growth.

“These efforts are important because an economy that is growing slowly cannot create enough jobs. It can also not generate enough revenue for government to fully implement the programmes needed to improve people’s lives,” Ramaphosa said in his weekly newsletter on Monday.

SA’s economy grew ahead of expectations in the second quarter at 0.6% as power cuts eased in June. Data released by the SA Reserve Bank in September showed economic activity grew 0.1% month on month in July after an upwardly revised 0.2% uptick the previous month, marking the second consecutive month of improvements in the business indicators after four straight months of declines. 

The SA economy — one of the largest and most diversified in Africa — however is still dogged by limiting fiscal constraints that have spurred the National Treasury to propose a raft of measures to rein in public spending, including implementing a wage freeze, a moratorium on new projects and cutting down the number of government departments.

In the newsletter, Ramaphosa said while SA has made progress in recovering from Covid-19, most South Africans are feeling the pressure of rising prices and a slow economy, despite the economy now being larger than it was before the pandemic and the 2-million jobs that were lost had largely been recovered.

“...The combination of global economic instability and the effects of our electricity crisis have meant that our economy continues to grow too slowly and is unable to create jobs at the pace we need,” said Ramaphosa.

The president met organised labour under the auspices of the National Economic Development and Labour Council last month, to thrash out ideas to grow the economy and create jobs.

Last week, Ramaphosa met the business sector under the umbrella of Business for SA.

“We have therefore given the pursuit of inclusive economic growth the greatest priority. We are acting with increased focus and effort to remove the most immediate constraints on growth — and doing so together with our social partners,” the president said.

“Our collaboration with business, for example, has moved far beyond discussions. Since June this year, government has been working closely with Business for SA on critical actions to address the key challenges of energy, logistics, and crime and corruption.”

Work is under way to improve the operational performance of the bulk freight rail network and port system through the National Logistics Crisis Committee : “Corridor recovery teams have been established for five strategic rail corridors, comprising Transnet executives, industry representatives and independent experts. They are working to urgently increase the volume of freight traffic on our rail lines,” he said.

Ramaphosa said it was this kind of cooperation in action, “even more so than negotiated agreements, that gives meaning to the concept of a social compact that is based on achievable outcomes”.

“Yet, while we have together identified key milestones and timeframes, the success of all these efforts will ultimately be measured by their impact on the lives of the South African people. From the progress that has been made to date, I am certain that this is a task at which we will together succeed.”

mkentanel@businesslive.co.za