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Cape Town – The SA government has committed to redouble its efforts in growing the economy after ratings agency Standards & Poor’s (S&P's) maintained a stable outlook.
“Insofar as the energy constraint is concerned, efforts to resolve the challenges are well under way,” National Treasury said in a statement.
“Eskom will be capitalised in a deficit neutral manner as per plan; independent power producers are delivering close to 2 000 MW of electricity and more have been contracted that will take their contribution to around 5 000 MW when construction of the plants is completed,” it said.
On Friday, S&P's affirmed SA’s rating at ‘BBB-/A-3’ with the expectation that real GDP growth would be limited to 2.1% in 2015, owing to electricity supply shortages among other factors.
S&P’s speculated that there will be a slight acceleration to an average of 2.7% per year over 2016-2018 “thanks to an increase in electricity generating capacity, domestic consumption, and rising net exports”.
“Tax increases, alongside the recent wage settlement for public sector workers, should help limit fiscal risks in 2015-2018, and we expect the treasury to stick to its pledged hard expenditure ceiling,” S&P’s said.
According to Treasury, the implementation of the National Development Plan is being embedded in the way government works.
“It started with the granular plan on the ocean economy and is being extended to agriculture and other areas of delivery.
“The role of cities as engines of growth and development is receiving special attention. All players are working very closely to drive a development agenda that will see our cities taking centre stage in development in the medium to long term,” Treasury said.
