Johannesburg - Deputy President Cyril Ramaphosa has called for decisive action to strengthen the economy, stimulate growth and create jobs after ratings agencies decided not to downgrade the country’s investment grade.
Ramaphosa told delegates at the Gauteng Economic Indaba in Woodmead, Sandton, on Wednesday that it was through working together that South Africa was able to convince the agencies not to dump it into junk status.
But he also admitted that South Africa’s economic woes were far from over, and that was underscored by the announcement on Wednesday that the economy had contracted by 1.2 percent in the first quarter.
He credited the decision to keep South Africa’s grade unchanged to the mutual working relationships between Finance Minister Pravin Gordhan and business and labour leaders, who went on a roadshow to speak to the rating agencies after threats of a downgrade.
The roadshow came after Gordhan’s re-appointment to the National Treasury following a turbulent period in December when President Jacob Zuma fired former finance minister Nhlanhla Nene and replaced him with Des van Rooyen. Nene’s axing wiped off billions of rand from the economy, raising fears of fiscal instability and attempts to take over the Treasury.
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Ramaphosa said Gordhan’s efforts had turned out “extremely positively” because of the consensus that was built.
“When the crunch hour came and we had to face rating agencies, our DNA (of working together) kicked into gear and produced these results. We are not in junk status because of the consensus that we built.”
Ramaphosa said the government’s nine-point plan demonstrated that, faced with tough economic choices, “we are able to live up to that challenge and address difficult issues”.
He cited the electricity crisis that the country had been facing months ago, which had almost brought factories to a halt but had been resolved through focused attention.
Ramaphosa, who is punted by some in the ANC in Gauteng to succeed Zuma as president of the party next year, praised the province.
He said the economic indaba was an initiative that placed inclusive economic growth at the centre of efforts to build a better society. For a province that contributed an estimated R1.3 trillion and 34 percent to the country’s gross domestic product, Gauteng was “no Mickey Mouse”.
He said Gauteng was where money was generated and then exported to the Western Cape for saving.
“We need an economy that serves the interests and needs of our people.
“Today we are in the midst of the largest infrastructure programme we have yet undertaken in the history of this country,” he said. “Residents are alive to the sea of change that this province is going through in infrastructure development.”
Ramaphosa said the greatest asset and resource the country had was its young population, who were hungry for education and skills.
“It is only through education and skills that we can unlock the potential of our nation. The way to build our economy in Gauteng is to be able to sit down and talk about what needs to be done about jobs, building business and streamlining government processes.”
THE STAR