Cape Town – Finance Minister Pravin Gordhan says government is addressing institutional and regulatory barriers that should help preserve the economy’s investment-grade status.
The Minister’s announcement comes after President Jacob Zuma, during his response to the debate on the State of the Nation Address, said government’s priority is to ensure that the country does not have its sovereign rating downgraded.
Tabling the 2016 Budget in Parliament on Wednesday, the Minister said government was, among other things, responding to appeals from the business sector for greater certainty in respect of policies that affect investment decisions and engaging with proposals from organised labour for a minimum wage policy, and for progress on opportunities for young people.
Government, he said, was responding to action in communities where services are missing or badly managed and crafting solutions to the voices of students regarding fees and housing.
“So we are resolved to restore the momentum of growth, to ensure that it is inclusive and sustainable, and to preserve our economy’s investment-grade status. This means we must address institutional and regulatory barriers to business investment and growth.
“It means we must give greater impetus to sectors and industries where we have competitive advantages,” Minister Gordhan said.
While the recent slump in commodity prices has affected South Africa and other emerging markets, the President said it was important for the country to focus its efforts in addressing domestic constraints that made it difficult to do business.
President Zuma said attracting investment was key to the country’s solutions.
On Wednesday, Minister Gordhan said there was a need for the country to be bold where there is need for structural change, innovation and doing things differently.
There was also a need for agility and urgency in implementation.
“International experience has demonstrated that growth is ignited by strong and stable political and economic institutions, sound infrastructure that reduces the cost of doing business and facilitates trade, competition between firms and openness to trade and an environment where firms invest and undertake research and development.
“We also know that the more inclusive the economy, the greater its scope for growth.
These are the challenges we hear in South Africa today.”
The Minister said the budget sets out government’s plans for the next three years, building on what has been achieved since 1994.
It also signals the actions underway to improve policy coordination and collaboration between social partners and stakeholders.
These include:
- The review of over 80 bills and plans since September last year as part of the new socio-economic impact assessment programme. The aim is to address possible regulatory constraints pro-actively before they take effect.
- Visa regulations being revised following consultation;
- Government and other sectors holding talks to improve workplace dispute resolution procedures;
- The Department of Trade and Industry is introducing a new investment promotion agency to streamline administrative procedures and enhance the country’s position as an African financial centre;
- Special Economic Zones and employment-intensive sectors with export potential being prioritised for support by the Industrial Development Corporation;
- Initiatives to transform ownership of land and improve productivity in agriculture being implemented and government addressing drought-related challenges in rural areas.
“The Community Work Programme is expanding its reach and Jobs Fund partnership projects of R12 billion have been approved.
“Building on the Phakisa oceans economy initiative, a R9 billion investment in rig repair and maintenance facilities at Saldanha Bay is planned, and work has begun on a new gas terminal and oil and ship repair facilities in Durban,” he said.
Minister Gordhan said the Department of Energy was overseeing the country’s renewable energy, coal and gas IPP programme, and preparatory work for investment in nuclear power.
He said The Department of Science and Technology is leading work on beneficiation initiatives, including titanium, fuel cells, fluorochemicals and composite materials.
The Department of Basic Education is working with social partners on the National Education Collaboration Trust to identify and implement school improvement initiatives.
“In recent weeks, other Ministers and I have engaged with business leaders to understand their concerns and views.
“Confidence and shared understanding have been reinforced. These engagements are clearly critical to boosting our economy, and must be extended to include regional forums and other stakeholders.
“We particularly welcome the working groups that have been established and several practical proposals for joint action,” he said.
Minister Gordhan said the initiatives include a collaborative initiative to combat corruption and abuse of tender procedures, a new fund to accelerate small and medium enterprise development and measures to build investor confidence and contribute to social cohesion.
“By removing constraints, supporting innovation, protecting jobs, diversifying our economy and exploring new opportunities, we can expand growth prospects.
“Our economic outlook is not what it should be, global uncertainty and the drought are very real challenges, but our efforts to build a better future continue.
“We are resilient, we are committed, we are resourceful. By working together we can increase growth, broaden participation and inspire confidence in our economy and society,” said the Minister. – SAnews.gov.za
