Cape Town – Government has several measures in place to ensure that the country averts a ratings downgrade, President Jacob Zuma said on Tuesday.
Addressing the National Assembly during a question and answer session, the President said the recently held Cabinet Lekgotla reiterated that it remains committed to the February 2016 fiscal targets, which are aimed at stabilising debt and containing the rate of increase in debt service costs.
The President said this when responding to a question by Democratic Alliance (DA) leader Mmusi Maimane, who had asked what plans government had in place to avoid a sovereign ratings downgrade while ensuring that jobs are created and that the poor are not affected.
“The Cabinet Lekgotla resolved to take the steps necessary to change the composition of expenditure towards investment so that government can make a contribution towards growing the economy and creating more work opportunities.
“We therefore have every reason to believe that our collective actions as South Africans can deliver a better economic performance in the next few months and years,” he said.
The President said this at the back of a recent announcement by Statistics SA that the country’s economy grew at 3.3% quarter on quarter in the second quarter of 2016 after recording a slower growth in the first quarter.
The President said recent data was a good sign that government’s collective efforts are beginning to yield fruit.
“We are sending a good signal to investors and rating agencies.”
He said that South Africa, like many other countries in the world, has witnessed a decline in economic growth in the last few years as the global economy lost momentum.
He said increasing interest rates in developed economies, constrained fiscal positions, lower commodity prices and increased political tensions in parts of the world have supressed both business and consumer sentiment.
At the G20 meeting in Hangzhou, China, leaders discussed how economies of the world can act collectively and in a coordinated manner support and ensure that growth is sustainable balanced and inclusive, the President said.
He also said that the Chinese Presidency of the G20 prioritised the implementation of structural reforms, as well as their individual comprehensive growth strategies which outline policy commitments to increase their domestic growth performance and in turn contribute to global growth.
“There is general consensus that countries have to prioritise structural reform as an effort to support domestic economies and contribute to better performance of the global economy.
“Our efforts to support the South African economy are anchored by the National Development Plan and supported by the Nine-Point Plan,” the President said.
President Zuma also said that the Cabinet Lekgotla had resolved to take all actions necessary to reinforce policy certainty and improve business confidence.
He said government’s efforts were also supported by improved collaboration with the private sector and labour.
He said business has been working on various initiatives to support the economy.
This includes recommendations for sector interventions in tourism, agriculture, health, manufacturing and setting up of a small business fund that has already raised R1.5 billion. – SAnews.gov.za
