DP Ramaphosa: Economic recovery on the horizon

Friday, September 8, 2017

The green shoots of economic recovery are now visible following South Africa’s recent emergence from a technical recession, Deputy President Cyril Ramaphosa said on Friday.

“As we shake off the psychological and material constraints of a technical recession, we recognise that progress has been made in several areas of our economy,” said the Deputy President.

He told delegates attending the 22nd National Economic Development and Labour Council (Nedlac) Summit in Kempton Park that government is looking towards its social partners in Nedlac to feed and nurture this economic promise.

The Deputy President’s comments come as Statistics South Africa (Stats SA) on Tuesday announced that South Africa’s Gross Domestic Product (GDP) grew by 2.5% in the second quarter following two quarters of negative growth, which placed the economy in a technical recession.

Deputy President Ramaphosa said while there is cause for hope, government remains conscious that business confidence is at its lowest level in 32 years and that employment levels remain little changed, with more than half of the population living below the poverty line.
 
“Of particular concern has been our responses to the challenges of poor economic growth challenges and its impact on labour market stability. Though we have done relatively well to respond to the post-2008 economic environment, we are now encumbered with sub-investment sovereign ratings,” he said.

South Africa’s emergence from the recession, the Deputy President said, should spur Nedlac members to continue to work together to entrench growth and long-term prosperity.
 
“The rise in GDP to 2.5% in this quarter is a clear sign that we can, when focused, rebuild and work collectively to reap better outcomes.”

South Africa’s unemployment levels remained unacceptably high, with over 9.3 million people being unemployed. Close to four million unemployed people are youth.

“The casualisation of employment is trapping many people in jobs with few benefits or prospects for development,” the Deputy President said, stressing that young people need to be skilled.

Labour Minister Mildred Oliphant said stubborn unemployment, job losses in various sectors and retrenchments have also meant that workers face a bleak future.

“This is when institutions like the Unemployment Insurance Fund will have to be ready to deal with unemployment insurance benefits claims that will shoot up,” she said.

She assured Nedlac that efforts to factor in the much-needed amendments to the Compensation Fund Act are at an advanced stage. Once approved, domestic workers will also be covered in the event of occupational injuries and diseases. 

National Minimum Wage

Minister Oliphant appealed for the expedition of the National Minimum Wage (NMW) draft legislative amendments. The amendments, she said, must be fast tracked so that “we can implement what we agreed upon, in terms of implementing the National Minimum Wage, by 1 May 2018”.

Deputy President Ramaphosa said the agreement on the NMW, which he described as a significant milestone, is something that must be celebrated as an example of what is possible when social partners work together for the national interest.

The Deputy President, however, highlighted the reality that inequality and poverty are still on the rise.
                                                                                                  
He said the country must sustain its implementation of the Nine-Point Plan, while government is also working on fostering greater competition and facilitating market entry for new enterprises.

The country is also building a strong cohort of black industrialists to expand and diversify the manufacturing base, while efforts to reduce regulatory burdens are also underway.

“We are implementing a lower ports tariff strategy with a view to grow the oceans economy. Through Operation Phakisa, we have thus far facilitated an estimated R24.6 billion in investment in the oceans economy, with government contributing R15 billion of this amount.”
 
Nedlac progress

Meanwhile, Nedlac Executive Director Madoda Vilakazi said the body achieved 41 of its 51 targets in the 2016/17 financial year.

Giving a report of Nedlac activities, Vilakazi said 10 special sessions on policy issues, including the Medium Term Budget Policy Statement (MTBPS) and the employment tax incentive, were discussed.

In addition, Nedlac received an unqualified audit opinion. Nedlac had an income of R31.3 million in 2016/17. – SAnews.gov.za

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