SA’s GDP suffered contractions of more than 4% in 2020 - Mboweni
JOHANNESBURG - Finance Minister Tito Mboweni has warned that South Africa was unlikely to reach its 2019 output levels before 2023, as the economy fell into a deeper contraction last year.
Mboweni said the country’s economy was among those that fell into the “severely affected” category in Africa because of Covid-19, suffering contractions of more than 4 percent of gross domestic product (GDP) last year.
“Without faster growth, South Africa is unlikely to reach 2019 output levels before 2023,” Mboweni said.
“The global economy has been gravely affected by the Covid-19 pandemic. However, 2021 looks promising, reflecting a surprisingly rapid recovery, particularly in the advanced economies of the world.”
Mboweni was delivering a keynote address at the virtual Zone 22 Rotary Africa Centennial International Conference on Sunday, about the economic outlook for South Africa and Africa.
He said South Africa could take lessons from Kenya, whose economy was expected to rebound by 8 percent this year, because it had fully implemented its economic recovery strategy.
Mboweni said Kenya had ensured that every step was taken to achieve the objectives that they had set.
“It’s a very big lesson in how, when policies have been decided upon, these are implemented without fail,” he said.
“When there is poor policy formulation and poor policy implementation, the consequences thereafter are dire indeed.”
Mboweni also addressed the issue of vaccine nationalism, saying the global community should strongly discourage it.
“The attempt by some countries to monopolise vaccines at the expense of poorer countries ... will result in the poorer countries suffering more with the outcomes of the vaccines,” he said.
“We should try to discourage vaccine nationalism wherever we find it.”
He said the Covid-19 pandemic had taught Africa a number of lessons, including the increasing role of the digital economy and digital transformation in tomorrow’s economies.
Mboweni said this reflected a widespread wave of disruption across traditional sectors in the global economy that was upending conventional business models and industries.
“Technology is redefining how economic activities occur across countries and paving the way towards digital economies, at national, regional and global levels,” he said.
“Digital economies can also help accelerate poverty reduction. For example, the World Bank’s Global Findex survey demonstrates that digital financial services can have a critical role in achieving financial inclusion.
“As we make digital financial services more accessible for lower-income segments of the population, we allow these individuals that are generally underserved by traditional financial services to benefit from digital transformation.”