News agency, Cape Town, South Africa
Wednesday November 14th 2018

Tough times ahead, says Zuma

President Jacob Zuma considers questions on the economy posed at the Wesgro Investor Forum in Cape Town on Wednesday evening. Photo: Steve Kretzmann/WCN

President Jacob Zuma considers questions on the economy posed at the Wesgro Investor Forum in Cape Town on Wednesday evening. Photo: Steve Kretzmann/WCN

Tough economic times lie ahead for South Africa as the global financial crisis deepens, warned President Jacob Zuma on Wednesday evening.

Speaking at the Wesgro Investor Forum at the Cape Town International Convention Centre, Zuma said signs emanating from Europe showed the threat of another economic “meltdown” were “very high”.

“Global interconnectedness means we cannot be spared the economic storm,” said Zuma to the 350 business leaders and government representatives present.

Greece was in deep trouble, Italy was “on their knees” and Spain wasn’t looking good.

“Europe could collapse,” he said, adding that is was “not helping” that the United States was not able to resolve its own problems.

However, he said South Africa was able to cushion itself from the 2008/2009 global financial crisis due to having a well regulated financial sector and the “huge” construction projects that were underway in preparation for the 2010 Fifa World Cup.

“The lesson we learnt is… to invest in projects when we are being challenged helps to cushion us against global fallout.”

To this end, he said R800bn has been set aside by government for infrastructure development in order to “partly cushion us” but this time around we could conceivably lose more than the one million jobs that were lost in 2009.

It was important for government, business and labour to work together to protect the country from eminent “flood” of job losses.

He reiterated the need for cooperation between government, business and labour a number of times, adding “government does not create jobs, it creates the right environment for business to create jobs”.

Although there was a “sharp decline” in demand for South African goods from the traditional markets of the global North, South Africa would continue to develop ties with these economies while also strengthening ties with emerging markets such as China, India and Brazil, as well as Africa.

He said at a recent Brics meeting in China, China asked SA to compile a list of 10 products which could be considered by China for preferential access to its markets. Those identified were: Agroprocessing – especially fruits and fish; Chemicals; Plastics; Stainless steel; Aluminium; Automotive products; Mining safety equipment; Industrial pumps; Power transmission related products; and Paper and pulp.

China should in their turn have more focused procurement missions to South Africa.

In the Western Cape, there was potential for growth in oil and gas services, textile and other manufacturing, tourism, and the film industry.

Questioned over the disjuncture between the number of taxpayers versus the number of people on social grants, Zuma admitted that social grants as they currently existed were not sustainable and “cannot be a permanent feature”.

He said the social grant system was “paying for the mistakes of those who came before”.

South Africa could not become a welfare state and social grants should only be available to the aged and disabled.

“We need programmes that develop the country to reduce the number of people receiving social grants to balance with taxpayers.”

In order to do this, education to provide skills was an “apex priority”. — Steve Kretzmann

Tags: domestic markets, economic collapse, European Union, global financial crisis, Jacob Zuma, South Africa, wesgro

Leave a Reply