CAPE TOWN – President Jacob Zuma has called a meeting of key ministers in a fortnight to devise a strategy to spur the South African economy out of recession, Finance Minister Malusi Gigaba said on Thursday.
“The president has stressed the urgency of a co-ordinated response, and is convening a full-day meeting in two weeks of various economic clusters and ministers responsible for key sectors, to address obstacles delaying the finalisation of policy processes and agree urgent timelines.
“We will be thrashing out detail as well as the timeline,” Gigaba said of the planned meeting.
He told a media briefing in Pretoria the president had also convened ministers in the economics cluster on Wednesday night to discuss critical interventions that need to be taken to avert further damage to the economy.
Speaking shortly after the release of the new Mining Charter by his Cabinet colleague Mosebenzi Zwane triggered an outcry, Gigaba urged him to meet with the sector and soothe the waters.
“We express the wish of National Treasury that the minister will engage with those sectors as a matter of urgency…to ensure that we do not have consequences that are going to weaken the economy further.”
He noted that policy uncertainty was an impediment to investment and said weakness in the mining sector had been one of they key contributors to low growth in recent years. Gigaba added that the concerns of political risks, poor governance of parastatals and the slow pace of introducing growth-enhancing reforms flagged by ratings agencies needed to be addressed “for the good of our country”.
He reiterated that it seemed highly unlikely that South Africa would meet National Treasury’s own gross domestic product growth forecast of 1.3% for the current financial year and said beyond maintaining the policy of fiscal consolidation, he would have to look at reprioritising funds and cutting state spending where possible.
“We are going to have to take hard decisions which may require that we look at the possibility of further cuts in terms of government spending,” he said, noting as an aside that public sector wage negotiations were looming.
“The reprioritising, the reallocation is going to be very difficult but necessary.”
The minister did not outline any precise steps National Treasury would take to shore up the economy, but signalled the need for stronger boards at Eskom, South African Airways and the South African Broadcasting Agency.
He confirmed that controversial SAA chairperson Dudu Myeni would not serve another term.
Asked about the tone and content of the meeting with the president, Gigaba described it as “very frank”.
He said the recession did not mean that his oft-voiced commitment to economic transformation would make way for a single-minded pursuit of growth.
“We need both.”
Asked about persistent allegations of corruption and nepotism against him and his deputy Sfiso Buthelezi, Gigaba said said he was no stranger to slurs and asked that they be given time and judged on their actions at treasury.
But an emotional Buthelezi vehemently denied allegations that he and his brother, Nkanyiso, benefited from contracts worth R150-million from the Passenger Rail Agency of South Africa, while he headed the board of the public entity.
“I am looking forward to cooperating with anybody and everybody who would want to question me,” he added.