South Africa is sticking to its target growth rate of 6% by 2010 despite a chronic power crisis and slower global growth, a government official said on Thursday.
Alan Hirsch, deputy head of the policy unit in the Presidency, said while the country’s growth rate will slow to 4% in 2008 in line with the Treasury’s forecast, the 2010 target set by the government’s economic growth plan, the Accelerated and Shared Growth Initiative for South Africa (Asgisa), is unchanged.
”International conditions and the electricity factor mean that we will grow more slowly this year than we did last year,” Hirsch said at the release of the Asgisa annual report for 2007.
South Africa’s gross domestic product grew by 5% in 2007.
”[But] there’s no reason at this stage … for us to change our poverty and growth targets,” Hirsch said.
The National Treasury forecast growth of 4% for 2008 in its budget in February, saying growth would slow because of weaker global conditions, slower consumer spending on higher interest rates and power problems.
Treasury Director General Lesetja Kganyago had earlier this year said South Africa was unlikely to reach the 6% target by 2010.
Africa’s biggest economy has enjoyed a growth rate of about 5% for the past four years, but a near collapse of the national electricity grid in January, which forced mines to shut for five days, has rattled investors.
State utility Eskom has blamed its woes on a combination of factors, including the failure of the government to invest in electricity-generating plants.
Asgisa was launched in 2006 with the aim of halving unemployment and poverty in South Africa between 2004 and 2014. — Reuters