Johannesburg - Shortly before news broke that Fitch Ratings had maintained South Africa’s credit rating yesterday, Finance Minister Pravin Gordhan pushed for an immediate implementation of the country’s various plans.
Speaking at the Gauteng Economic Indaba in Johannesburg, Gordhan said: “One of the lessons we have learnt is that people interested in South Africa do not want more plans. It is only by implementing that we can know if a plan is right.”
He said the country should turn investment ideas into “real deals”.
Speaking ahead of the Fitch decision, Gordhan was optimistic about the country’s chances of avoiding a downgrade. “We have great strengths to draw on,” he said. These included strong institutions and a “robust” legal framework, well developed capital markets, as well as what he said was renewed vigour from government, business and civil society for economic reform.
He lauded co-operation between the government, labour and business. “In the past four months, meaningful progress has been made in building a strong social compact between leaders in the government, business and labour for accelerated investment and joint effort in fostering inclusive growth in South Africa.”
He, however, flagged the low domestic business confidence and low commodity prices as some of the problems facing the country.
PwC’s latest annual mine report said this week that there had been a 25 percent decline in commodity prices last year with nickel named as the worst performer, falling by 41 percent and iron ore a close second falling by 40 percent.
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Business confidence plummeted to a record low in May, data showed on Tuesday. Gordhan said the government was removing barriers to growth. “A process is under way to improve port tariffs. New pricing structures are expected to be implemented soon.”
Gordhan said in addition to the various efforts to resolve the country’s electricity problems, the government was streamlining the licensing processes for mining, environmental authorisation and water use.
Meanwhile, Gauteng premier David Makhura said the provincial government intended to increase expenditure in social and economic infrastructure.
He said the bulk of the planned investment would go towards improving energy and water infrastructure, enhancing public transport infrastructure, “and building mega human settlements and post apartheid cities”.
Makhura said the Gauteng provincial government had prioritised investment in infrastructure. A 10 percent increase in infrastructure spending led to a percentage increase in gross domestic product, he said.
“Our infrastructure master plan will be supported by various interventions to reduce red tape and cut costs of doing business. The National Development Plan is a vision and programme for all of us. All provinces and municipalities can do more to implement it,” Makhura said.
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