ANC Responds to Recession, Urges South Africans to Rally Together

The African National Congress says the latest figures from Statistics SA represent an urgent call to action for all South Africans to rally behind a common vision of growing the economy and job creation.

The figures show that the South African economy moved back into a technical recession with a negative growth rate of (-0.7%) during the second quarter of 2018 (after 2.6% contraction in the first three months of the year)…. resulting in the SA rand falling further on Wednesday morning, trading at 15.5400 versus the dollar, 1.2 % weaker than its close on Tuesday.

Apart from the mining sector, all other productive sectors experienced a contraction, particularly agriculture (which suffered from the drought).

The ANC said the recession is a result of a “prolonged trend of slowdown in economic growth”, and said a “stimulus package” must be activated immediately… which would include tax incentives for those companies that create jobs, and the lowering of data costs.

The Chair of the Subcommittee on Economic Transformation, Enoch Godongwana, said the following interventions need to be undertaken now:

• South Africa’s macroeconomic policies must enable economic growth and development, closely coordinating fiscal and monetary policy.

• Develop and support industries that can rapidly absorb employment, which may include tax credits for those that invest in sustainable job creation.

• Utilise government’s procurement muscle to localise industries, transfer knowledge and skills… and thereby reduce imports in due course;

• Reduce the regulatory red-tape and delays to encourage new manufacturers and other economic activities

• Expand the value chains to serve a larger and growing African market

• Drive the establishment of a strong co-ordinating mechanism between cluster departments… with support for small and medium sized business participation.

• Step up maintenance of existing infrastructure and partnerships with communities. Government to upscale investing in economic and social infrastructure that include work on public buildings, courthouses, schools, hospitals etc.

• Invest in projects that include road repairs and resurfacing, bridge repairs and maintenance, safety improvements, and road widening – they result in high employment and can be implemented quickly without planning and design required.

• Agricultural support packages that will boost economic growth and food security, together with properly-designed and executed land reform boosting skills development measures directed at supporting young people to find work opportunities developing and implementing a support package for township and rural enterprises to broaden the base of economic participation.

• Reprioritise the budget to boost Extended Public works programmes
. On broadband rollout, the ANC calls for urgent steps to bring down the costs of data and speeding up spectrum release to expand the ICT industries.

• Develop South African skills and knowledge while preparing to manufacture products based on the evolving technologies.

“The African National Congress believes that opportunities exist for the revival and/or strengthening of the economy through the prioritisation and full support of governmental interventions,” said Godongwana in a statement.

He also referred to the  Job Summit which will be held at the beginning of next month, and said it provides “not only an opportunity to mobilise domestic savings but an occasion to rally all South Africans behind a common vision of growing the economy and job creation. Government must seize this initiative!”