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South Africans saw a joint show of force as government, labour and business shared the progress made by the work streams established by President Jacob Zuma to assist the country to avoid a credit downgrade.
Zuma said last night that the government would reduce policy uncertainty in order to boost economic growth.
“To respond to the challenges we face, we have decided on some short-term interventions, in addition to implementing the nine-point plan. One of these is to reduce policy uncertainty and shore up confidence in the government’s ability to deliver on its promise of boosting growth,” Zuma said during a press briefing at the Union Buildings last night.
“More than that, we need some concrete initiatives which ensure a turn-around in our economic fortunes.”
Zuma said the reform agenda focused on jobs and growth as well as addressing poverty, inequality and unemployment.
The collaboration between government, labour and the business sector followed talks in February between heads of major companies and captains of industry to find ways in which they could work together to reignite economic growth and create jobs.
Zuma said the engagement had come up with initiatives that included the establishment of a joint private and public sector fund for small business support with about 50:50 contributions by the partners.
“The focus is to provide ‘venture’ capital-type funding and mentoring to the target groups, especially black entrepreneurs. To accelerate inclusive growth, we must expand investment. In this regard, the model we used for renewable independent power producers offers valuable lessons,” he said.
“As part of scaling up investment we will move with speed to extend the model to coal and gas as I had announced in the State of the Nation Address in February.
We have agreed to expand government and private sector co-investment in infrastructure,” said Zuma.
He added that they were exploring appropriate mechanisms of strengthening state owned enterprises so that they could reduce the risk they pose to the fiscus and play a stronger role in driving development.
“The credit ratings work stream will identify potential areas of reforms and interventions to avert further credit rating downgrades. South Africa is now beginning to realise how we can work together as Team South Africa in the interest of our country and people,” said Zuma.
The private sector has set aside R1.5 billion to help small and medium enterprises survive the tough economic climate.
Chief executive of Discovery, Adrian Gore, said “the fund is a private sector initiative. We are hoping that government contributes but we are focusing on what business can provide. We have injected R1.5 billion into the fund but ultimately we are hoping to raise R3 billion.”
“There has been a strong, overwhelming intent to support this and it bodes well for the future.”
Deputy-President Cyril Ramaphosa said the government wanted to see the fund increased to double digits to ensure small business can be assisted to create jobs.
“We want to see it going to R10 billion so that it can support entrepreneurs who are the great job creators in the economy,” said Ramaphosa.
Zuma said: “I mandated the minister of finance to lead a process of engaging with the private sector in particular to map out a strategy to the goal of growing the economy. Leaders from labour and business joined the minister of finance on a roadshow abroad early this year to promote the country and prevent a possible credit ratings downgrade. The hard work is paying off, and we saw the evidence this weekend with the announcement by Moody’s.”
Zuma said Moody’s had acknowledged that the country was at a turning point following years of weak economic growth. He attributed this to the collaborative efforts of all the stakeholders involved. He said despite the economy showing signs of recovery, the level of economic growth have been much weaker than previously anticipated.
Finance Minister Pravin Gordhan said that rating agency Standard & Poor’s would arrive in South Africa on Monday as part of its review of the country’s rating.
– News24 and City Press reporter
