DA warns of zero growth trap for SA

Cape Town - South Africa’s economy runs the risk of becoming trapped on a zero growth, said David Maynier, DA spokesperson on finance.

He reacted to the latest GDP figures released by Statistics South Africa on Wednesday, which showed a negative growth rate of -1,2% in the first quarter of 2016.

“We cannot go on like this,” Maynier said. “With 8.9 million people currently unemployed, it is now imperative that government work together with the Minister of Finance, Pravin Gordhan, to end policy uncertainty [and] to implement structural reform necessary to boost economic growth.”

DA MP James Lorimer, who serves on the Portfolio Committee on Mineral Resources expressed concern over the fact that mining production plummeted by more than 18% in the first quarter of 2016. Mining and quarrying were the biggest contributors to the negative growth rate in this period.

Said Lorimer: “This is the third quarter that saw a drop in mining production out of the last four and it is the biggest drop by far.

“The ANC must get its head out of the sand and recognise the real cause of the slow-motion collapse of the mining sector. It’s not international trading conditions alone but also wads of investment unfriendly regulations and corruption in the mining space that adversely affect this sector and invariably leads to the shedding of jobs.”

The mining industry is currently shrouded in uncertainty with a new draft Mining charter on the cards and the draft Minerals and Petroleum Resources Development Amendment (MPRDA) bill still unconcluded.

“A drastic change in approach is urgent,” Lorimer said. “Government could start by withdrawing the ill-conceived MPRDA Bill, which continues to languish in legislative doldrums, as well as the new draft Mining Charter which blindsided the industry earlier this year.”