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Minister in the Presidency Jackson Mthembu told reporters on Thursday that Cabinet has decided to respond to South Africa's latest recession by adopting an aggressive spending strategy on catalytic projects and initiatives.
Statistics South Africa announced last week that the economy's gross domestic product for the final quarter of 2014 decreased by 1.4%, after contracting by 0.8% in the third quarter. This plunged South Africa into a fresh technical recession.
Since then, further hurdles have emerged, including a fresh spate of load shedding; the coronavirus pandemic, which has wreaked havoc on global markets; and a price war between Saudi Arabia and Russia which resulted in a record oil price crash.
During the first post-Cabinet briefing of the year, Mthembu told reporters that government was aware of the challenges dogging the South African economy and that it was committed to continue investing in projects it hoped would either ignite growth, or set the country up for growth in better times.
"Cabinet reflected on the release of Statistics South Africa's report on Gross Domestic Product which reveal that South Africa slipped into a technical recession.
"Despite acknowledging the debilitating effects of load shedding, Cabinet remains resolute in fixing the fundamentals, pursuing critical areas of growth and driving collaborative solutions with all social partners so that together we set the country on a path to economic growth," said Mthembu.
Mthembu told reporters that the catalytic infrastructure spending that President Cyril Ramaphosa announced during his State of the Nation Address in February was already bearing fruit and that projects worth a quarter of a trillion rand were currently under development.
"We are intensifying our investment and to date projects with an investment value of R9 billion have been completed and 27 projects worth just over R250 billion are in implementation phases, with more coming on stream this year," Mthembu said.
Mthembu said Cabinet did not discuss plans to provide financial assistance to Eskom, which are currently the subject of discussions between government, business and labour under the auspices of the National Economic Development and Labour Council.
