23 October 2013
South Africa’s economy is expected to grow by 1.4% to 3.5% over the next three years, Finance Minister Pravin Gordhan told Parliament on Wednesday, outlining a number of measures the government has taken to remove constraints to growth in the country.
Presenting his medium term budget policy statement in Cape Town, Gordhan said the country’s gross domestic product (GDP) had slowed down from 3.5% in 2011 to 2.5% in 2012 before being revised down to 2.1% in 2013.
This came on the back of stagnant growth caused by global as well domestic factors including labour unrest and production stoppages in the country’s major industries.
“After we came into office during a tough time of economic recession, the past four-and-a-half years has been a period where we have demonstrated a great deal of political leadership,” Gordhan said.
Through collaboration with business, labour and state-owned companies, the government had tackled short and long-term sectoral constraints to deal with economic challenges and bringing about stability.
This included an agreement to work towards the rapid and peaceful resolution of labour disputes in the mining sector, the biggest contributor to South Africa’s GDP. Other measures that were expected to boost growth included:
- Improving the efficiency and pricing capacity of local ports in order to reduce transport costs and enhance competitiveness;
- Investing in freight capacity to help alleviate bottlenecks; and
- Improving access to finance and support services for small businesses.
South Africa’s ports regulator had maintained its 2012/13 price structure while reducing export and import tariffs; Transnet’s R2.3-billion rail upgrade of the rail network servicing the port of Coega would raise the country’s annual manganese export capacity from 5-million to 20-million tons; and the introduction of a 200-wagon rail service from Mpumalanga’s coalfields to the Richards Bay coal terminal in KwaZulu-Natal was expected to boost coal exports by 30%.
And the Small Enterprise Development Agency provided support for 2 282 firms through the creation of 10 additional business incubators offering a wide range of business and technical support services.
In August, Gordhan unveiled a modernised customs management system which he said would reduce paperwork and other red tape, making it easier and more affordable to do business with South Africa and promote intra-African trade.
This, coupled with improved global conditions and infrastructure investments, would increase the demand for South African exports and bring in more foreign investment.
Sub-Saharan Africa, meanwhile, is expected to record economic growth of 5% in 2013 rising to 6% in 2014, thanks to improved economic management and political stability supporting increasing investment into the continent, particularly in Angola and Nigeria.