Mineworkers strike during the Lonmin protest. (Picture: Sebabatso Mosamo, City Press) ~ City Press
Pretoria - Strike activity in mining and other sectors, weak business confidence and a widening current account deficit held back investment and job creation in South Africa, Finance Minister Pravin Gordhan admitted on Thursday.
Gordhan said these problems reflected a series of binding constraints and unsustainable imbalances in the country.
“But South Africa has a sound foundation from which to address these challenges. Macroeconomic policy settings and institutions will continue to promote stability, certainty and confidence,’ Gordhan said.
“Flexible monetary policy will balance low and stable inflation with support for growth and financial stability.”
Macroeconomic policy remained supportive of economic activity, but on its own could not generate the growth or jobs required to make inroads into higher levels of poverty and inequality.
Complementary reforms that address structural impediments are vital to raise employment levels and broaden participation, lift competitiveness and promote social cohesion.
He admitted for the first time that the widespread strikes in the mining sector had a negative impact on the economy this year.
Gordhan said events at Lonmin’s Marikana mine and the spread of industrial action since August have dented confidence and lowered growth prospects for the remainder of the year.
The national development plan (NDP), endorsed earlier this year by cabinet, outlines an approach to eliminate poverty and reduce inequality by raising employment, productivity and earning levels.
The key levers it identifies are creating jobs through faster growth, improving the quality of education, skills development and innovation, and building the capability of the state to implement policy and deliver services effectively.