Cape Town – Since December the future of South Africa has been more certain and optimistic, Minister of Public Enterprises Pravin Gordhan said on Wednesday, adding that the government needs to be seen taking visible action to restore trust in SA Inc.
He was the opening speaker at a seminar on the theme “The Future of South Africa” hosted by Bloomberg LP in Cape Town.
It is good news that the country's gross domestic product grew by 1.3% in 2017, when most thought it would be only between 0.8% and 1%, Gordhan said.
“Agriculture has, for instance, created dynamism and increasingly plays a very important part in the economy in terms of job creation, re-industrialising,” he said.
“Issues of land and getting more people involved in our economy is very important. The new leadership in the country has exciting ideas as set out in SONA (the State of the Nation Address). Government is clear on the need for renewal and unity of purpose of South Africans.”
Gordhan believes government needs to work with greater urgency to create higher levels of trust among citizens and, above all, boost investment.
In order to achieve this, it needs to clear up some uncertainties.
“There is growing confidence in the country and as we begin to deliver on the plans President Cyril Ramaphosa has set out. That will also build greater confidence in our economy,” said Gordhan.
“Words alone won’t create the levels of confidence, trust and cooperation we require. There needs to be actions and action orientation.”
He said government understands the challenges the country faces, especially regarding inclusive growth and growth that is redistributed and provides benefits to a wider section of the population. That too would require investment.
Ramaphosa’s plan to convene an investment conference in the next three months is exciting for Gordhan.
Another aspect he raised is the challenge of youth unemployment where he feels much more needs to be done, both by the private sector and government itself.
Then there is also the issue of state-owned enterprises (SOEs).
SOEs shouldn't strain state guarantees
“In my new job we have to look at the maladies affecting SOEs, especially at Eskom, Transnet and to some extent at Denel as well several others in other portfolios. The brief is clear: how do we get SOEs to play an economic role?” asked Gordhan.
“Hopefully in the next few weeks we can announce more on this.”
It is important for Gordhan to ensure that SOEs are not a burden on the fiscus, do not strain government guarantees and also don't create constant doubt about potential defaults.
“We have to especially change the mindset of funders who traditionally had confidence in SOEs and were willing to lend billions of rand, but recently – understandably - had doubts,” said Gordhan.
“Part of the challenge is to get rid of the stain of state capture and corruption. Hopefully the commission of inquiry indicated by President Ramaphosa will happen soon.”
Gordhan would like to see known transgressors face the normal course of the law.
“In three months’ time we will hopefully have answers... on what has been done. The president is quite clear. We want to create a social compact in South Africa for unity of purpose to create a new path our country needs to follow,” said Gordhan.
“We must ensure inclusivity and the land issue is addressing who benefits from GDP growth, globalisation and trade. How do we ensure all levels of the population are beneficiaries of economic growth?”
He concluded by saying the future of South Africa is in good hands, and the country has exciting prospects.
“The only question is how much do you want to be a part of that,” he said.