Gordhan: SA at a crossroads

Cape Town - South Africa as a nation is at a crossroads, politically and economically, said Finance Minister Pravin Gordhan on Wednesday in his medium-term budget speech. 

“We must look frankly at ourselves and ask what is working for us and what is not, and what needs to change. It’s not just that our economic outlook is distressed,” Gordhan said, adding "there is the possibility of downgrades in the in credit ratings and the cost of debt.” 

He listed a number of serious challenges the country is currently facing, including the most severe drought in decades and rising food prices, as well as the “unsettling effect of legal matters and court challenges”.

Two weeks ago, Gordhan was summoned by the National Prosecuting Agency to appear in court on fraud charges, following the payout of pension package to a former colleague at the South African Revenue Service. 

His court appearance will take place on November 2. 

“These are considerable challenges, Honourable Speaker,” Gordhan said in Parliament on Tuesday, but added that these problems could be addressed – “rationally, deliberately, and through the appropriate procedures”.
 
“Much more disturbing, and more difficult, is the rise in our own communities of anger and discontent, spilling over into violence and destructive protests,” Gordhan added.

He said the protests signalled unresolved social challenges in the country. “They present immense challenges to the leadership of our higher education institutions, municipalities and community organisations. Highly stressful demands are made on our police and security personnel. Destruction of property diminishes the inheritance of our children. 

“Our social contract is under pressure. It is as if we have put unnecessary hurdles in the way of realising our potential and implementing our development plans.” 

According to Gordhan, policy statements in South Africa are sometimes “unclear” or in conflict with each other. In addition, he said, commitments are made without clear resource plans; implementation is derailed by institutional instability; investment is held back by uncertainties and erosion of trust; and “vested interests and political contestation” interfere with decision-making. 

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