The South African economy is expected to grow at a rate of 2.7% in 2014 and 3.5% in 2015 after recording a paltry 1.9% growth in 2013.
Coming from the 2014/15 national budget which was presented by the minister of finance yesterday, these gross domestic (GDP) numbers shows that the country is trapped in low growth area and will struggle to meaningfully address its high unemployment rate.
The minister, Pravin Gordhan, did, kind of, acknowledge the low growth problem in his speech.
“We have achieved much over the past five years, in a very difficult post-recession climate. But there is more to do ahead, more to build, more to put right, more to learn, more to implement,” said Gordhan.
Fellow South Africans, let me be frank with you – the world economy is still in difficulty, and global institutions are struggling to find their way.
In South Africa, we stabilised our economy after the 2008 crisis. We have achieved a recovery in growth and jobs. Yet we need to do more, together with labour, business and all stakeholders, to lead our economy in a new, bold direction for higher growth, decent work and greater equality.”
A statement released by treasury yesterday said “outh Africa needs faster and more inclusive economic growth to reduce unemployment, poverty and inequality. But faster growth over the medium term requires bold decisions to change the structure of the economy to increase the level of competition and innovation, raise the level of savings, reduce the cost of transport and communication, improve regional trade and increase integration into the global supply chains.
Gordhan said” To make more rapid progress in creating jobs and reducing poverty, we have to grow our economy at 5 per cent a year or more.”
“Our plans for the period ahead are focused on the transformation imperatives that will accelerate growth, create work opportunities and build a more equal society.
This Budget lays the foundation for the structural reforms envisaged over the next term of this Government. It sets out the resource plan for an intensified implementation of our National Development Plan. It is tabled in the knowledge that all South Africans will gain from our economic transformation, just as we all share a new pride and identity in our Constitutional democracy.
So the new economic order we seek cannot just be a pact amongst elites, a coalition amongst stakeholders with vested interests. Nor can it be built on populist slogans or unrealistic promises. Our history tells us that progress has to be built on a vision and strategy shared by leaders and the people – a vision founded on realism and evidence.”
We have to work together to radically change our economy. This means working with our major businesses so that they sparkle across the globe. It means working with black entrepreneurs to grow their companies across South Africa and beyond, working with small and large businesses to build value chain linkages that support dynamic export oriented, competitive enterprises. It means bringing those who are marginalised into the mainstream of opportunity and activity. It means a better standard of living for all.”
Here is the full budget speech: Budgetspeech2014