Global uncertainty impacts SA: Gordhan

Friday, August 19, 2011

Pretoria - Global growth uncertainties create a hesitant climate for South Africa, says Finance Minister Pravin Gordhan.

This follows weak global economic growth and various issues in Europe, the US and Japan, among others.

"The prospects for global growth seem dimmer all the time. This kind of uncertain outlook creates a hesitant climate, even for South African investors and business people," Gordhan said on Thursday at the launch of the 2010/11 annual report of the Land Bank.

The minister said opportunities were open to both government institutions as well as small and large business in South Africa.

"We should ask ourselves, where can a breakthrough be made, even in this gloomy outlook? The big emerging markets have their own challenges in growth cycles at the moment. We must put our heads together to restructure and reposition the South African economy."

Gordhan emphasised that issues of inequity and joblessness needed to be addressed as a matter of top priority.

"We cannot have a situation where a small group of people accrue all of the benefits of economic growth and a large number of people are in actual terms on the margins of the benefits of economic growth. That is not a sustainable formula for the future."

According to Statistics South Africa, unemployment in the second quarter of 2011 rose to 25.7%.

Gordhan said it was time to confront these issues as well as to move away from this unsustainable path towards creating greater parity in the South African economy.

The Land Bank, together with its partners, said Gordhan, could contribute towards job creation and the reduction of poverty while also supporting emerging farmers who face challenges of skills, access to finance and markets.

He said though agriculture has been identified as a potential sector capable of solving unemployment, one of the problems identified wass the lack of participation in this sector by the youth.

In February, a budget R1.1 billion was set aside to expand the Department of Rural Development's National Rural Youth Services Corps. To date, about 9 000 youth have been incorporated into the programme that is aimed at ensuring that rural youth are absorbed into the mainstream economy.

Agriculture contributes about 2.5% to South Africa's GDP.

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