Fi­nance Min­is­ter re­veals plan to re­vive South African econ­omy

The Star Early Edition - - BUSINESS REPORT - Di­neo Faku

FI­NANCE Min­is­ter Malusi Gi­gaba yes­ter­day ar­tic­u­lated his vi­sion for the econ­omy for the first time since his ap­point­ment in March when he un­veiled gov­ern­ments in­clu­sive growth plan to grow the econ­omy.

The 14-point ac­tion plan aims to lift the econ­omy to a higher growth path through re­build­ing busi­ness con­fi­dence and to staving off the risk of a down­grade on lo­cal bonds.

Gi­gaba told jour­nal­ists in Jo­han­nes­burg that through the ac­tion plan the gov­ern­ment was demon­strat­ing that it was tak­ing steps to grow the econ­omy.

“I am con­fi­dent that we can achieve higher growth as a plat­form to achiev­ing a 3 per­cent growth that can go up 6 per­cent,” he said, adding that the plan would help ad­dress the triple chal­lenges of poverty, un­em­ploy­ment and in­equal­ity.

The 14-point ac­tion plan con­tains tar­gets and time­lines and each in­ter­ven­tion is as­signed to a min­is­ter and fo­cuses on a range of is­sues from en­ergy to state-owned en­ter­prises (SOEs).

It re­quires that Eskom ap­proach the Na­tional En­ergy Reg­u­la­tor re­gard­ing its hard­ship by the end of the month.

An­other tar­get is for a case to be de­vel­oped and be sub­mit­ted to the Trea­sury and the Eskom board for the com­pany to re­ceive soft sup­port un­til a tar­iff ad­just­ment next year.

“We are ex­press­ing a deep ap­pre­ci­a­tion of the weak­en­ing of Eskom’s bal­ance sheet. There is an ur­gency for us to pro­vide as­sis­tance in or­der for the com­pany to ful­fil their man­date,” Gi­gaba said.

He also said that the Min­is­ter of En­ergy would un­veil a mech­a­nism to sup­port Eskom un­til the next tar­iff ap­pli­ca­tion, adding that the debt ceil­ing would not be breached.

“What­ever we do now must not breach the tar­get debt ceil­ing. If we stretch the ceil­ing we will in­tro­duce a mas­sive cri­sis for the econ­omy,” said Gi­gaba.

The plan also fo­cuses the re­cap­i­tal­i­sa­tion and guar­an­tees of SOEs, which in­cludes the re­duc­tion of guar­an­tees to SOEs and the need to con­tinue en­gage­ments on frame­work for the dis­posal of non-core as­sets by March next year.

It also wants an amend­ment of the en­abling leg­is­la­tion for li­cens­ing of Post­bank by De­cem­ber, and for the Depart­ment of Telecom­mu­ni­ca­tions and Postal Ser­cives to com­plete the spec­trum li­cens­ing process by De­cem­ber.

Ray­mond Par­sons, a pro­fes­sor at the North West Univer­sity’s School of Busi­ness and Gov­er­nance said the plan recog­nised the head­winds fac­ing the coun­try and in promis­ing ac­tion Gi­gaba’s plan could be seen as a step in the right di­rec­tion. “The gov­ern­ment is now be­gin­ning to en­gage with what needs to be done if the econ­omy is to be turned around and SA is to break out of its ‘low growth trap’,” he said.

He also said fur­ther de­tails would only be unpacked in the Medium Bud­get Pol­icy State­ment in Oc­to­ber. It was not pos­si­ble to al­ready say that what was an­nounced would be ad­e­quate to re­store con­fi­dence.


Min­is­ter of Fi­nance Malusi Gi­gaba yes­ter­day ar­tic­u­lated his vi­sion for the econ­omy.

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