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South African Economy Still Faces Tough Time

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Although South Africa’s economy is showing growth, it continues to face uncertain times, says Deputy Finance Minister Nhlanhla Nene.

“There is no room for complacency and we continue to face a great deal of uncertainty during this current period of adjustment within the global economy,” he said.

The deputy minister was speaking at an event hosted by the Sugar Industry Trust Fund for Education in Durban on Wednesday.

In the first quarter of 2011, South Africa’s economy grew by 4.8 percent.

“While this recovery is stronger than a year ago in South Africa and in most other emerging market countries, its foundations are not yet sustainable; and it is still highly dependent on support from expansionary fiscal and monetary policies,” said Nene.

Skills challenges and education still are issues to be confronted by the Republic and a vibrant economy is needed to address poverty and unemployment.

“Unemployment represents our greatest challenge: only 13 million South Africans, or 41 percent of the working-age population, have regular work,” explained the deputy minister.

He expressed concern at the high level of unemployment among the youth at 42 percent. “Although the economy has recovered, employment is still below its pre-crisis level. Something must be done.”

The New Growth Path, which aims to create five million jobs in the next decade, is estimated  to create over a million jobs in infrastructure development and housing, while a further 500 000 jobs would be created in the agricultural sector and 350 000 in manufacturing. Tourism is targeting 225 000 jobs and mining 140 000.

The deputy minister said higher employment in the manufacturing sector, meanwhile, will rely on successful implementation of the second Industrial Policy Action Plan (IPAP2), which was also unveiled last year to provide new direction and impetus to South African manufacturing.

The reform of development finance institutions is also underway.

Nene said the Path will fail to meet its targets if an environment that is conducive to private-sector growth and business investment is not promoted. “This requires Government to provide economic stability and reduce the cost of capital through sound macroeconomic policies.”

The deputy minister acknowledged the role played by the private sugar industry in its efforts to create opportunities, such as giving bursaries for studies in agriculture, sciences and engineering. “These areas are among the critical skills required to fuel our sustainable and inclusive economic growth.”

The South African sugar industry generates an annual estimated average direct income of R8 billion, with direct employment within the sugar industry at approximately 77 000 jobs. – BuaNews

Editors Notes: No Sh*t Sherlock! Watch what happens when the rates, water and electricity increases begin to bite and people do not have money to spend at all! I have a sneaky suspicion that the World Cup cushioned us from the worst of the global financial meltdown and that the real suffering is about to begin.

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Alan Straton

Chief Cook, Bottle Washer and Broom Mechanic at MyPE
Passionate about Port Elizabeth and definitely NOT packing for Perth. Alan's ethos is epitomised in the words of Nelson Mandela; "I have fought against white domination and I have fought against black domination. I have cherished the idea of a democratic and free society. If need be, it is an ideal for which I am prepared to die." See more articles by Alan.