President Cyril Ramaphosa appeared on SABC to address the nation some few hours after the unemployment rate rose to 27.2% in August, the ANC wanted to implement a stimulus package to boost economic growth and reduce unemployment rate, he said, controversially speaking as an ANC leader rather than the country’s first citizen.
The ANC doubled down on its stimulus plans on Wednesday after Statistics SA announced the economy has fallen into a recession after GDP had declined for the second consecutive quarter.
Ramaphosa has been in Beijing at the Forum on Africa-China Co-operation this week and it was up to the ANC’s subcommittee on economic transformation chairperson, Enoch Godongwana, to address the latest economic crisis.
“The technical recession is a result of a prolonged trend of slowdown in economic growth,” said Godongwana, pointing out the obvious in a statement on Wednesday. “We have an aggregate demand problem.”
He reiterated the ANC’s recent position to take “immediate, concrete and bold steps to lift the rate of growth and its inclusivity by activating macro-economic policy tools, institutional efficiencies and specific sector interventions as central instruments to mitigate the effects of a contraction in economic activity.”
“This requires that there be a significant difference in the aggressiveness and approach through which recovery measures are implemented by government,” he said.
Many of the ruling party’s planned stimulus initiatives are repeated generalisations that lack detail. Macroeconomic policies must be coordinated to boost growth and industries that can create jobs must be supported, perhaps through tax credits, it said.
It said government procurement should focus on local industries and regulatory red-tape should be cut. Godongwana said government should increase maintenance and development on public infrastructure, such as roads, hospitals, schools, housing developments, and water and sewer projects, to increase employment and drive economic growth.
Agriculture, manufacturing and trade has seen two consecutive quarters of negative growth, with agriculture declining 29.2% in the second quarter of 2018.
Maimane has written to National Assembly Speaker Baleka Mbete requesting an urgent debate on the ailing economy. He called on voters to remove the ANC in the 2019 elections.
IFP spokesperson Mkhuleko Hlengwa said Ramaphosa has failed to change the economy and offered “nothing but statements of intent and placatory remarks”.
“We have been down this road before and quite clearly the ANC has run out of ideas and has now once again tanked our economy back to the levels of the 2008 global economic crisis,” said Hlengwa.
The EFF and trade union federations said the current economic system is flawed and will continue to fail unless it is radically changed. EFF spokesperson Mbuyiseni Ndlozi dismissed the “Ramaphoria” that followed the president’s election.
“The idea that you can grow the economy because you feel good about the person occupying the presidency and yet, he has not proposed any radical changes to the economy [and] instead has called for endless summits, demonstrates the degeneration of thinking both by private sector and government,” said Ndlozi.
Recession blues: ANC calls for aggressive economic stimulus https://t.co/W9bGfYb3rY By Greg Nicolson @gregnicolson pic.twitter.com/jcxQ0XWyY0
— Daily Maverick (@dailymaverick) September 6, 2018