Private-sector aid rescues SA government
The SA government has been granted some much needed help in the form of R170 million private-sector aid following poor GDP data.
Ever-closer ties have allowed private-sector aid of R170 million to flow between business and government, and not the other way round. In a difficult week that started with Stats SA releasing poor GDP data for the fourth quarter of 2023, it became clear that South Africa is effectively in a ‘per-capita recession.’
That’s according Chief Economist for Citadel Maarten Ackerman, quoted in a Daily Investor report. She said South Africa’s population is growing faster than its economy. Therefore, because South Africa’s GDP increased by just 0.1% in the fourth quarter of 2023, but the population grew at 1.5%, that means we’re effectively in a ‘per-capita recession’, confirmed Ackerman.
PRIVATE-SECTOR AID FOR GOVERNMENT
Nevertheless, there are some positives to end the week on. Firstly, Minister of Public Enterprise Pravin Gordhan has announced his retirement at the end of the current political term (29 May 2024). Secondly, there’s exceedingly positive news about private-sector aid flowing back to government.
In June 2023, President Cyril Ramaphosa appealed to private business to dig deep and assist wherever possible with finances and expertise. This was to address the country’s many problems: Energy, logistics, crime and corruption being top of mind. This week (Tuesday 5 March), the President announced that the collaboration is yielding tangible results.
BUSINESS UNITY SOUTH AFRICA
Now, Business Unity South Africa (BUSA) and co-convener Discovery Limited CEO Adrian Gore, have announced R170 million in private-sector aid and 350 technical experts were mobilised to assist government in the last nine months. The Resource Mobilisation Fund was initially established by private business to help solve the country’s electricity crisis but its remit is growing.
Next on the private sector’s hitlist is the logistics crisis hampering an already curtailed economy. BUSA is looking to scale up this funding model to support government where possible. Together the partnership hopes to boost South Africa’s economic growth rate by as much as 6% by fixing the country’s collapsing ports and rail network.
“We need to capitalise on this momentum and urgently implement the necessary reforms to improve societal and investor confidence in South Africa and grow the economy inclusively,” concluded Gore.