OWN CORRESPONDENT, Johannesburg | Tuesday
SOUTH African President Thabo Mbeki has said in remarks published this week that next year’s February budget would provide a boost for the economy.
”In the forthcoming budget, there will be, I am quite certain, an increase in investment activity by the public sector,” he told the country’s Star newspaper.
There would be announcements involving ”state assets” and ”quite significant investments into infrastructure into urban areas,” he said. He gave no further details.
Finance Minister Trevor Manuel said in October that the 2001 budget would trim income taxes further, after measures this year which reduced the top rate of income tax to 42% from 45%.
The government is also expected to unveil more details of its privatisation plans, set to raise R40bn in the next four years.
It has said it will begin with an initial public offering of up to 30% of telecoms operator Telkom, during the second half of 2001.
Mbeki said that although foreign investment was important to South Africa and there was room for improvement, domestic inflows were equally important.
Foreign direct investment into South Africa is hovering at a paltry one percent of gross domestic product.
He said a re-evaluation of growth by Statistics South Africa during the year showed that the economy was stronger than initially believed.
Implementation of the Free Trade Area (FTA) between South Africa and the European Union – South Africa’s main trading partner – on January 1, 2000 had begun to have a positive impact on the economy, although this was not fully evident.
”In fact, the South Africa economy responded quite quickly, with an increase in exports in a significant way,” he said. – Reuters