SA sets the example on macroeconomic stability

Wednesday, October 30, 2013
Amukelani Chauke

While global economies felt the pinch in recent years of serious recessions and other economic setbacks - South Africa can be thankful to have ridden the wave – due to strict management of the country’s fiscus.

Through collaboration with business, labour and state-owned companies, the government has tackled short and long-term sectoral constraints to deal with economic challenges and bring about macro-economic stability.

South Africa’s keen macroeconomic stability can be seen as one of the success stories of the last two decades of democracy in the country.

When tabling the 2013 Medium Term Budget Policy Statement – dubbed the mini budget – in Cape Town this week, Finance Minister Pravin Gordhan said the country’s economy has grown by over 80% since 1993, and that the national income per capita, or income per person, has increased by 40% in real terms.

While unemployment remains a tiny thorn in the side locally and globally, employment has gone up by more than 3.5 million.

Fixed investment increased from 15% of GDP in 1993 to an average of 20% over the past five years. Over R600 billion in BEE transactions have been recorded since 1995 and more than 15 million people are now eligible for social grants.

Over three million homes were built – increasing the number of households that have access to electricity, water and sanitation.

To instil macroeconomic stability, the Finance Ministry has over the years maintained good levels of fiscal management and sound monetary policy. And it is through this that the ministry has managed to ride the tide despite risks due to external shocks, especially the recent slow growth recorded by the Eurozone – SA’s traditional trade partners.

And to keep up with international tax norms and to ensure that the country’s tax system can play the role of promoting inclusive economic growth, create jobs, development and contribute to fiscal sustainability, the Ministry has over the past 20 years appointed a tax review committee to review the system - twice.

This, along with other reforms, has gone a long way in ensuring that the lives of South Africans are better than they were before.

And the Deputy Minister of Finance Nhlanhla Nene agrees that the lives of South Africans have improved post-apartheid.

In a recent chat with SAnews in his office in Cape Town, Nene said: “If you look at the housing units that have been built over the years, provision of basic needs like water and sanitation, electricity that has been provided to many households, roads that we have built over the years…

“There are so many achievements we can look back and had it not been for the manner in which we have addressed the five priorities that we have set for ourselves, life in the rural areas is no longer as it used to be pre 1994.”

But, Nene was also frank on whether or not government was satisfied with the progress made.

Taking stock, we have really done well under the circumstances but we could have done better.

Using what has been done to track progress and to measure whether the goals that we set ourselves have been achieved is the best way to go forward.

Knowing our shortfalls helps us know how we can do things differently – and sometimes innovatively – to achieve more.  The fact that public servants have been roped into the party means that they have to put their best foot forward and understand that the needs of the people must come first – at all costs.

“At times we get so consumed into the difficult situation and the difficult environment that we find ourselves; we forget that the lives of South Africans have changed for the better,” Nene said. –



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