Johannesburg. – Government and private sector representatives are confident of South Africa’s and Africa’s growth prospects despite strikes and considerable capital outflows, it emerged in a Bloomberg forum on Monday.President Jacob Zuma, Finance Minister Pravin Gordhan, FirstRand chief executive Sizwe Nxasana and ArcelorMittal SA chief executive Nonkululeko Nyembezi-Heita were among government and private sector leaders who addressed an Africa forum.
President Zuma said although uncertainty remained in the global economy, economic growth across many African countries remained “robust” and this would attract investments into the continent.
South Africa’s economic growth is lower than that of many of its African counterparts due to a combination of factors, ranging from weak global and domestic demand to wage strikes.
Mr Gordhan said South Africa should concentrate on implementing the National Development Plan to grow the economy.
The NDP is a 30-year growth and development strategy which proposes large infrastructure development as one way to unlock economic growth.
“We will survive this crisis as we have survived others,” he said with regard to the capital outflows confronting emerging markets.
The rand has weakened in recent weeks in line with other emerging market currencies as investors invest in developed countries where growth prospects are improving.
The US Federal Reserve has also been reducing the billions of dollars it has been pumping into its financial markets to stimulate economic growth since the recession.
While the weak rand has made inputs such as petrol more expensive, manufacturers are beginning to gain from higher export earnings.
Ms Nyembezi-Heita said that the benefits of the weak rand would have been more pronounced if international demand was stronger.
Investors have also been pulling out of local assets due to strikes. Foreign investors sold more bonds than usual in the first week of the platinum mine strikes.
Mr Gordhan said while concerns about strikes in South Africa were warranted, they should be assessed carefully. While mine workers at some of the major platinum producers are on strike for higher wages, only a small proportion of the more than 14-million employed people were involved, he said. “We can’t deny there are huge challenges in parts of the mining sector,” Mr Gordhan said, but he added there were others who were “dutifully” doing their work.
He said “intensified dialogue” was required between business and labour to sort out disagreements over wages and labour laws.
Government would play the role of a facilitator and “create the regulatory framework.”
While most employers have been raising concern over labour laws and difficulties around hiring and firing practices in South Africa, Mr Nxasana said the situation was not as difficult as in some other countries.
He said it was “much harder” to fire workers in countries such as India and Ghana. - Businessday.