Details of stimulus package on the way — Mokonyane

Cabinet’s interventions aimed at resolving South Africa’s latest recession will begin to take shape after the upcoming investment and job summits, according to Communications Minister Nomvula Mokonyane.

Mokonyane announced this during a post-Cabinet briefing in Pretoria on Thursday morning. She says that the recession announced by Stats SA on Tuesday was discussed by Cabinet on Wednesday in Cape Town.

The South African economy contracted by 0.7% in the second quarter of 2018, following a revised 2.6% contraction in the first quarter.

READ MORE: SA’s economy dips into recession dashing economists hopes

Mokonyane said Cabinet called on South Africans to get behind government-led initiatives aimed at driving economic growth.

“Although some sectors of the economy, such as mining, construction and finance recorded an improvement in growth, this was insufficient to offset the contraction in other sectors, such as the agriculture sector,” said Mokonyane.

Mokonyane said exports recovered strongly, but that this was offset by contractions in household expenditure. Meanwhile investment growth by private companies increased, but this was met with contraction in public sector investment.

“The upcoming job and investment summits, as well as the proposed government stimulus package, will provide details on the reforms needed to drive growth,” she said.

She said government would pump support into sectors of the economy which showed promise, to compensate for the under-performing sectors which dragged growth figures down.

“We will embark on a complete overhaul of the visa processes to boost tourism, reforms in mining and other reforms needed to drive growth. We remain committed to fiscal stability,” Mokonyane said.

When asked whether there were any immediate measures government could announce to improve the economy’s prospects in the long term, Mokonyane said government was in the process of collecting information needed to establish its stimulus package for the economy.

“The stimulus package has been raised by the president to say it will be presented in a short period. We also had many other engagements, such as a Cabinet Lekgotla and the costing of initiatives. A pronouncement will be made in due time,” she said. — Fin24

READ MORE: R48bn needed for Ramaphosa’s stimulus packages

Khulekani Magubane
Khulekani Magubane

Khulekani Magubane is a senior financial reporter for Fin24. 

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