Deputy President Cyril Ramaphosa addressing the closing session of the Indigenous and Traditional Leaders Indaba. (Supplied, GCIS) ~ Supplied
Cape Town - South Africa needs to do what
other nations do during times of economic weakness and come up with a recovery
plan that grabs the imagination of investors and its people, Deputy President
Cyril Ramaphosa said in an interview in Cape Town.
In his first comments since the release of
Finance Minister Malusi Gigaba’s mid-term budget last week, Ramaphosa described
the South African economy as “moribund.”
"We are facing a new situation,”
Ramaphosa said Saturday. “A number of economies around us are growing, the
world economy is responding very positively in terms of growth, but we are
moribund and we need to come up with a plan that needs to take us out of this.”
South Africa’s rand slid to the lowest in
almost a year after Gigaba painted a bleak picture of the state of the
country’s finances, with the economy set to expand 0.7% this year, down from
1.3% predicted in the February budget.
Yields on the nation’s bonds also rose as
the projections raised the risk of further credit-rating downgrades, with the
nation’s debt already rated junk by S&P Global Ratings and Fitch Ratings.
Lower growth and revenue will feed through
to a higher budget deficit. The gap is expected to jump to 4.3% of gross
domestic product in the current fiscal year, up from a projected 3.1%. The
shortfall will probably stay at 3.9% of GDP for the next three years. That’s a
break from the National Treasury’s past pledges to steadily narrow the deficit.
"We need to come up with something
that grabs the imagination of our people and the markets, so that the markets
can see that we are an economy that is worth investing in, because right now we
have almost been facing a situation of an investment strike," Ramaphosa
A former union leader and one of South
Africa’s wealthiest black businessmen, Ramaphosa, 64, is running for the
leadership of the African National Congress in December, a post that would make
him the party’s presidential candidate in 2019 elections when President Jacob
Zuma is due to step down.
His main rival is former African Union
Commission chairwoman Nkosazana Dlamini-Zuma, the president’s ex-wife and favoured
Ramaphosa has made the fight against
corruption the centrepiece of his campaign and made attacks on Zuma, who’s been
implicated in a series of scandals, including allegations that he allowed
members of the Gupta family to loot billions of rand from state companies. Zuma
and the Guptas, who are in business with the president’s son, deny wrongdoing.
"Companies are not investing in our
economy. They are concerned about the political instability and so we have to
reboot out economy," Ramaphosa said.
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