Pressure is piling on President Cyril Ramaphosa’s administration to jump-start the country’s battered economy.
Ramaphosa on Tuesday said that he would implement an employment stimulus plan within the next month.
The president reacted after Stats SA revealed the most recent GDP results, which showed the country had slipped deeper into recession during the nationwide lockdown.
Stats SA said that the economy shrank by 16.4% from the first quarter to the second quarter.
But to look at this differently, if the economy continues to contract in a similar way for the next few quarters, Stats SA said the annualised figure is 51%.
“While the 16.4% contraction in the second quarter (or 51% on an annualised basis) represents an anomaly due to the lockdown imposed at the end of March, these figures nevertheless reinforce the importance of enabling a strong rebound in subsequent quarters,” Ramaphosa said in a statement.
“Countries across the world are facing significant economic disruption as a result of the pandemic, leading to the worst global downturn in decades. South Africa has not been spared these realities,” he added.
Ramaphosa said that there were two important processes before he could implement his employment stimulus.
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First, he wants social partners to present a social compact on economic recovery to him. Thereafter government would finalise its recovery strategy.
“This strategy will include fast-tracking urgent structural reforms, expanding employment programmes, facilitating large-scale investment in infrastructure projects, and implementing measures to promote localisation and enhance regional and continental trade.
“Finally, the Presidential Employment Stimulus will commence implementation within the next month and will expand opportunities through public and social employment to counteract job losses,” Ramaphosa said.
But economist Isaah Mhlanga said that more needed to be done.
“We are going to have a long time of economic recovery largely because we don’t have the fiscal space to actually respond much more aggressively than other countries but also because we are doing the economic reforms much slower, which means investment is going to take much longer to recover,” Mhlanga said.
Ramaphosa said that the country could not continue with business as usual, and the time was now to act quickly and boldly to place South Africa on a rapid growth trajectory.
Source : Eyewitness News