Jacob Zuma downplays economy fears - but rand drops to lowest in four years

President Jacob Zuma has tried to assure South Africans the economy will come out of the doldrums, despite growing signs that not all is well.

Speaking at a special media briefing at the Union Buildings this morning, Zuma tried to downplay the meaning of a 0.9% gross domestic product growth rate for the last quarter.

The lower-than-expected economic growth figures, which were released this week could be an early indication that the country might not achieve its projected growth rate of 2.7%.

The economy shed 100?000 jobs in the last quarter of 2012.

South Africa, the leading economy on the content, has one of the lowest growth rates in the sub-Saharan African region.

This has led to projections that Nigeria, the continent’s second biggest economic powerhouse, will take SA over the next few years if current trends continue.

“The figure means that we must strengthen economic performance and increase the rate of investment. Growth in the remaining three quarters will have to be much higher for us to achieve the projected 2.7%...

“We need faster growth. Without faster growth we cannot succeed in reducing unemployment, poverty and inequality,” he said.

He said the government would double its efforts in a bid to support the 3.5% annual economic growth rate the National Development Plan say should be achieved to improve the economy.

Zuma also pleaded with labour and employers in the mining sector, the mainstay of the SA economy for decades, to recognise the impact the sector’s labour relations has on the rest of the economy.

The government’s New Growth Path policy 140?000 new direct jobs in mining by 2020, but the sector has been threatening to shed some jobs lately.

It is also the one sector which has seen massive labour unrest and disruption since the Marikana eruption last year September.

“We call on fast and expeditious settlements of wage negotiations that can contribute to the attainment of the country’s job creation and job retention goals,” Zuma said.

Deputy President Kgalema Motlanthe is leading government interventions in the sector, with the help of Finance Minister Pravin Gordhan, Labour Minister Mildred Oliphant and Mineral Resources Minister Susan Shabangu.

Zuma said he will be given progress reports on the intervention while he is abroad. He leaves for Japan this afternoon.

Rand weakest in more than 4 years

The rand fell more than 1.7% against the dollar today, edging closer to the R10 mark after President Jacob Zuma warned about the impact of labour strife in mining on the economy.

The rand hit 9.9940 to the dollar, its weakest since mid March 2009, compared with yesterday’s close at R9.82. - Reuters

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