12 February 2016

South Africa: Ministers Upbeat After Zuma's Economy SONA

Deputy Finance Minister Mcebisi Jonas, who had three different line managers in four days during that infamous week in December, said President Jacob Zuma delivered a "good speech" that focused on ways to grow the economy.

He told Fin24 after Zuma's State of the Nation Address on Thursday evening that South Africa is in a "very dire situation", which "requires ... drastic measures to turn around the economy".

Asked whether Zuma left most of those changes to the budget speech later this month, he said "indeed, we do have to manage the stabilisation of the economy very well, as we try to grow it".

Regarding the engagement between business and government, he said: "South Africans are coming together and business has a serious interest in seeing growth in our economy."

"We should avoid the pluralism of business and government, and work together and co-invest, actually," he said.

Quizzed on the crisis Treasury experienced when Nhlanhla Nene was ousted in December, Jonas said Treasury always remained steadfast in its goals and remained "focused in what it's supposed to do".

A need to accelerate industrialisation of SA

Department of Trade and Industry Minister Rob Davies told Fin24 that business in South African needed to develop a more positive narrative about the domestic economy.

"We're affected by the mineral commodities slump," he said, but added we have other things "going for us".

He mentioned the auto programme, the renewable energy programme, as projects South Africa has in place "and which are yielding good results".

"We need to build on those and take those examples and lessons into the sub-sectors and work on moving up the value chain and industrialising our country as part of the continent," he said.

"This slump of prices is just telling us we need to accelerate (the industrialisation of South Africa, as) the primary products are not where the real value lies," he said. "You need to move up the value chain, diversify and industrialise - that's the way forward."

In an attempt to avert being downgrade to junk status by ratings agencies, Davies said government is working "very energetically with the business sector to do so".

He said Finance Minister Pravin Gordhan's budget speech will inform ratings agencies to South Africa's fiscal policy, but they will also have to believe the country has "things in our economy, which are going to be able to sustain a growth story".

Source: Fin24

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