Johannesburg - The private sector and government must work together to grow South Africa's prosperity, Finance Minister Nhlanhla Nene said in Johannesburg on Tuesday.
“While the global economic outlook has improved moderately, South Africa cannot rely on external developments to alleviate domestic growth constraints,” he said in a speech prepared for delivery at a KPMG forum.
Collaborative partnerships across society were needed to stimulate the economy, which needed to be more competitive, diverse, and inclusive.
“The next phase of growth is about the dynamism and agility of the private sector and the synergies between the private sector and government,” he said.
This would lead to more job creation and greater revenue generation.
In the last quarter of 2013, 5500 formal jobs were shed in the private sector, mostly in the finance, insurance, real-estate and business services sector, and the mining sectors, he said.
“Of the total mining sector contraction of around 25 percent in the first quarter, the drop in platinum production as a result of the strike accounted for about 19 percentage points.”
The Association of Mineworkers and Construction Union was expected to sign agreements later on Tuesday, bringing an end to the five-month strike at Anglo American Platinum, Impala Platinum, and Lonmin.
Nene welcomed this development.
“The ending of the strike in the platinum sector should have a positive impact on sentiment and ultimately economic growth.”
Nene said the country's constrained electricity supply had detracted from the growth potential and effected investment decisions, but Eskom was expected to commission the first unit of its Medupi Power Station by the end of the year.
“The National Development Plan provides us with a menu of options to boost our development and growth prospects. The business before us now relates to the prioritisation of options and working through some tough trade-offs,” he said.
Government had unveiled a number of measures to improve the competitiveness of the private sector, which would help build a more stable macro-economic environment.
For example, R847 billion from the national budget had been allocated for infrastructure investment over the next three years.
Companies with operations in the rest of Africa would benefit from a simplified tax and foreign exchange framework, and the cap of these benefits would be upped for listed companies.
The labour force, government, and private sector each had roles to play to reach the balance needed for stronger economic growth and job creation.
“We must find a balance between meeting the earnings expectations of shareholders, the realisation of vision of economic transformation required by the electorate, and occupying our rightful place as global corporate citizens,” Nene said.
“Such a balance is possible.” - Sapa