The ANC’s head of economic transformation Enoch Godongwana has conceded that the country’s current economic situation is of its own making.

He says stimulating economic recovery requires at least three key responses. These are strengthening confidence in South Africa’s ability to adhere to a fiscal consolidation path, improving the efficiency of expenditures as well as strengthening revenue collection.

Godongwana on the country’s economy and the way forward:

Godongwana says power shortages are a huge contributing factor to the country’s slow economic growth.

“Two things which have contributed to this economy which are of our own making – is electricity shortages. It’s unacceptable that we have had shortages since 2008 and we continue trying to fix Eskom and electricity supply. The second issue has been the working of state institutions through various means including corruption. So those issues we must admit have not helped the economy and have and therefore exacerbated unemployment and poverty issues. Those are the issues that have got to be tackled head-on.”

Government wage offer

Yesterday, some public sector unions signed the government’s 1.5 % offer of a below-inflation salary increase, accompanies by a monthly cash allowance of over a thousand rand per month.

Unions say they had to concede that public finances are under pressure due to the COVID-19 pandemic which necessitated the government to provide income relief measures.

Most industries both in the public and the private sector had to either retrench or had to freeze salaries since the economic downturn that resulted from the COVID-19 outbreak last year