Pravin Gordhan should go one step further: We need to know what needs to be fixed!

 9 June 2016

Finance Minister Pravin Gordhan’s statement that South Africans lack the urgency to implement important issues and his call for all to cooperate to get out of the current dire economic circumstances lacks important elements. South Africans need to understand exactly what needs to be fixed and, secondly, political leaders should behave in a way that will develop trust and commitment. It would be insane to continue along the same path the country has followed since 2012.

South Africa’s economic and political leadership needs to set aside their differences and announce and implement a plan that will improve South Africa’s economic growth rate and labour absorption capacity as a matter of urgency. The country simply can’t afford to continue on its current path. It is clear that current “compromise” policies are not working and that the country needs a drastic rethink of its plans going forward. We need the most optimal policies to get South Africa back on the economic growth track. The economy shrank by 1.2% in Q1 2016 and further contraction is highly likely – this will most definitely lead to ratings downgrades by S&P and Fitch (either by year end or next year), which in turn will contribute to further contractions in the growth rate, to be followed by further ratings downgrades.

A smaller government deficit alone will not be sufficient to get the country back on a strong growth path. We need to speed up policy formulation and implementation to increase the economy’s labour absorption capacity and in this way further stimulate growth. We urgently need a stable political climate and strong, united leadership from the private sector and labour unions to work us out of the current impasse.

Issued by Andre Venter, Media Spokesperson, UASA, 9 June 2016