Finance Minister Pravin Gordhan says government is committed to restore economic growth. Unveiling his Budget Speech in Parliament on Wednesday, Gordhan says inclusivity among other things is key to economic growth.
The Minister’s speech comes at a difficult time as South Africa faces a further credit rating downgrade. The business sector is also calling for greater certainty in respect of policies that affect investment decisions.
“International experience has demonstrated that growth is ignited by strong and stable political and economic institutions, sound infrastructure that reduces the cost of doing business and facilities trade, competition between firms and openness to trade an environment where firms invest and undertake research and development. We also know that the more inclusive the economy the greater its scope for growth.”
In order to address challenges facing the economy, government is reviewing bills to mitigate possible regulatory constraints before they take effect. “Over 80 Bills have been reviewed since September last year as part of the new socio-economic impact assessment programme, under Minister Radebe’s oversight.”
South Africa’s Growth Domestic Product (GDP) slowed marginally from 1.5% in 2014 to 1.3% in 2015. It is expected to decelerate to 0.9% in 2016 and improve to 1.7% in 2017.
Government also plans to invest more in the public sector. “To finance the investment needed for sustainable growth, we have the institutional capacity to blend international and domestic savings and to combine public and private sector financing to mitigate risk and reduce the cost of capital,” says Gordhan.
An amount of R70 billion will be spent on energy investment this year; “and will be over R180 billion over the next three years as construction of the Medupi, Kusile and Ingula power plants is completed.”
Transport and infrastructure is also one of the government’s investment focuses. “Transport and logistics infrastructure accounts for nearly over R292 billion for the next three years under Minister Peter’s oversight.”
Other investments will also include housing subsidy programmes which has been allocated R62 billion and education infrastructure at R54 billion.
Click below for the full speech:
– By Lerato Matlala
