Finance Minister Nhlanhla Nene says South Africa’s biggest problem is economic growth. He added that the low growth environment has made it difficult for government to address the country’s challenges of unemployment and inequality.
Nene was speaking during a press briefing on the side lines of the World Economic Forum’s round table which took place in Johannesburg.
For the first time, the World Economic Forum has held a round table, where leaders meet to address a country’s challenges. The round table brought government and investors together to discuss the country’s challenge with unemployment, inequality and poverty.
Nene says South Africa’s inability to implement its plans has also contributed to the current low economic growth. However, Nene says government is working on diversifying the economy to restore growth. This is after the country’s economy contracted 2 .2 % in the first quarter.
World Economic Forum Africa Head Elsie Kanza says the South African economy is vulnerable to global commodity prices because of its reliance on the mining sector. The looming trade war between the US and China is threatening the sustainability of the manufacturing sector.
This is as high steel tariffs could make it difficult to export local steal product while uncertainty over the government’s stance on land has impacted investor confidence negatively.
Kanza says there are no quick fixes to South Africa’s renewal. This is after investors lost faith in the country’s institutions following rampant corruption and mass looting of State Owned Enterprises.
Meanwhile, Nene has admitted that state capture has eroded the efficiency and profitability of State Owoned Enterprises, adding that Eskom is a threat to the country’s growth prospects.