Business unusual as economy takes strain

Thursday, February 11, 2016

Cape Town – President Jacob Zuma says the current challenges faced by the economy require for all role-players to do things differently.

In light of events in the global economy, which have also had an impact on domestic growth, President Zuma said that public-private partnerships are important to stimulate economic growth and create jobs.

The President delivered his State of the Nation Address in the National Assembly on Thursday night.

He said over and above the fact that the country’s economy has been under pressure since the 2008 global economic meltdown, several external factors – including the latest drop in commodity prices – have dealt the economy a major blow.

“The situation requires an effective turnaround plan from us. It is about doing things differently and also acting on what may not have been acted upon quickly before,” he said.

The President said South Africa remains an attractive investment destination. He said while it may face challenges, its positive attributes far outweigh the negatives.

“We must continue to market the country as a preferred destination for investment. This requires a common narrative from all of us as business, labour and government.

“If there are any disagreements or problems between us, we should solve them before they escalate. This is necessary for the common good of our country,” he said.

Earlier this week, President Zuma held a high-level meeting with CEOs of top companies to discuss the current economic challenges and how the country could turn the situation around.

He said government has heard suggestions on how the current economic situation can be turned around as well as putting the economy back on the path of positive growth.

“We have heard the points about the need to create an investment support infrastructure. Government is developing the One-stop Shop/Invest South Africa initiative to signal that South Africa is truly open for business.

“We will fast track the implementation of this service in partnership with the private sector. Such an initiative requires that government removes the red tape and reviews any legislative and regulatory blockages,” he said.

The President said government has established an Inter-Ministerial Committee to ensure the success of investment promotion initiatives.

Turning SOEs around

He said government was also made aware of concerns over the performance of state-owned enterprises (SOEs) and companies.

“Many of our SOEs are performing well,” the President said. “Sanral has built some of the best roads in Gauteng and in many parts of the country. These make us the envy of many parts around the globe.”

He said Transnet has built rail infrastructure that has enabled the country’s mines to move a large bulk of commodities through the ports to market around the globe.

He said Eskom, despite its challenges, continues to keep the country’s economy going against all odds.

The country’s development finance institutions, such as the Industrial Development Corporation and Development Bank of Southern Africa, have provided finance for infrastructure of various industries and agricultural businesses without fail.

“For the SOEs to contribute to the successful implementation of the National Development Plan, they must be financially sound. They must be properly governed and managed,” he said.

He said government will ensure the implementation of recommendations from the Presidential Review Commission of SOEs, which advise how institutions should be managed.

He said the economic conditions that South Africa faces should propel all South Africans to redouble their efforts to ignite growth.

“It is important to act decisively to remove domestic constraints. We cannot change global conditions but we can do a lot to change the domestic constraints. Let us work together to turn the situation around. It can be done.” –