SA: Cabinet pleased with strategy to grow economy

Pravin_Gordhan_-Wikimedia commons
Minister Pravin Gordhan

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Pretoria – Cabinet has taken note of the report back by the Minister of Finance to the President on the progress of government’s consultations with the private sector and labour on the economy.

The President tasked Minister Pravin Gordhan to lead engagements with these social partners to map out a strategy and come up with measures for growing the economy and preserving the country’s credit rating.

“Cabinet is pleased that this work has culminated in concrete initiatives that will improve the country’s economic prospects,” said Acting Minister in The Presidency for Planning, Monitoring and Evaluation, Nosiviwe Mapisa-Nqakula.

She was addressing media during a post Cabinet briefing on Thursday in Cape Town.

The President announced several priority initiatives on Monday, which include:

  • a joint private and public sector fund for small business support;
  • addressing constraints to increasing investment in order to accelerate inclusive growth;
  • government and private sector co-investment in infrastructure, drawing on the experience of the successful Independent Power Producer Programme, and
  • strengthening State-owned enterprises to ensure their financial sustainability and reinforcing their role in driving development.

“These announcements are testament to what this country can achieve when all social partners come together to work towards the same goal,” the Minister said.

Meanwhile, Cabinet remains confident that government’s aggressive fiscal consolidation, the historic R1 trillion collection by the South African Revenue Service and the recently announced five short-term interventions, all complement the Nine-Point Plan to ensure a turnaround in SA’s economic fortunes.

“The increased revenue collection by SARS will further enable government to deliver services that will improve the quality of lives of all its citizens,” Minister Mapisa-Nqakula said.

Cabinet has also welcomed the announcement by rating agency, Moody’s Investor Services, which over the past week reaffirmed the country’s credit rating at two notches above sub-investment grade.

In affirming the rating, Moody’s noted that South Africa was approaching a turning point after years of weak growth and the aggressive consolidation measures in the 2016 budget will stabilise government debt to GDP in the current year.

“All parties are agreed that collaborative efforts need to be strengthened to give impetus to the economic recovery. We also note that the Minister of Finance’s work with social partners includes a credit ratings work stream that will identify potential reforms and interventions to preserve South Africa’s strong capital markets and investment grade credit rating,” the Minister said.