Share

Downgrade would be disastrous for Gauteng - Makhura

Johannesburg – The Gauteng economy will continue to strengthen its international relations strategy (IRS) which aims to grow trade and investment, according to premier David Makhura. However, a credit downgrade may threaten plans to grow the province’s economy.

Makhura was speaking at a media briefing on the province’s progress in trade and investment in Sandton on Friday.

“A downgrade would be disastrous, it would be disastrous for an economy like Gauteng,” he said. “We are internationally connected… The outflows that would happen would harm us.”

He added that stakeholders should work together to avoid a downgrade of South Africa's credit rating to junk status, but that there was a general sense of an improving environment from rating agencies.

The IRS, which was established last year, focuses on improving the trade competitiveness of Gauteng and aims to make the province a gateway for the rest of the continent. It seeks to strengthen political and social relations with regions such as Asia, the European Union, North and South America and the Southern African Development Community (Sadc), Makhura explained.

Key objectives of the IRS are to boost exports from the province, draw in foreign direct investment flows and increase tourism. This will ultimately grow the province’s economy, create employment opportunities and improve citizens' standard of living, said Makhura.

Silver lining to weak rand

Gauteng MEC Barbara Creecy expanded on the tourism opportunities in the province. “The silver lining in the cloud of the weakness of the currency is that is has made exports more competitive, and has made South Africa more attractive as a tourism destination for leisure and business tourists,” she said. “We can see the impact of the weakness of the currency in a positive sense.”

Gauteng’s biggest export trading partner is the EU with trade valued at R175bn, followed by the USA at R33bn and the UK at R6.8bn. Exports include capital equipment such as manufacturing and machinery. Future tradable sectors that have been identified include financial and business services, transport and communication, agriculture and mining.

Capital equipment exports largely occur among the Sadc countries and are used for mining activity, he explained. In 2014 trade stood at R512bn; it rose by R6bn in 12 months to R518bn, he said. There are plans to increase trade flows going forward.


Gauteng premier David Makhura and MEC of Finance Barabara Creecy. (Lameez Omarjee)

Brexit impact yet to be seen

Makhura said the impact of Brexit on future trade relations with the EU is unknown. “The EU is a big driver, but the UK in its own right is a trading partner of South Africa,” he said.

Makhura said Gauteng would continue to focus on sustained trade and investment relationships with the UK and EU countries. “Our task is to ensure it helps fit into our strategy. We can’t be sleeping or leave it to chance,” he said.

LISTEN: Gauteng Premier David Makhura on navigating Brexit

Gauteng remains a key investment destination for the rest of the world and a trade gateway for imports and exports. The province has an economy worth R1.1trn, and contributes 35.1% to GDP.

Makhura said migration is important to bring skills to the province. “People complain about migration, but it also brings talent. Talent contributes to our economy enormously,” he said.

Read Fin24's top stories trending on Twitter:
We live in a world where facts and fiction get blurred
Who we choose to trust can have a profound impact on our lives. Join thousands of devoted South Africans who look to News24 to bring them news they can trust every day. As we celebrate 25 years, become a News24 subscriber as we strive to keep you informed, inspired and empowered.
Join News24 today
heading
description
username
Show Comments ()
Rand - Dollar
19.02
-0.4%
Rand - Pound
24.13
-0.1%
Rand - Euro
20.64
-0.2%
Rand - Aus dollar
12.39
+0.3%
Rand - Yen
0.13
+0.4%
Platinum
901.05
-0.2%
Palladium
999.00
-0.7%
Gold
2,149.46
-0.5%
Silver
24.83
-0.8%
Brent Crude
86.89
+1.8%
Top 40
65,951
-0.5%
All Share
72,164
-0.4%
Resource 10
53,288
-0.1%
Industrial 25
99,497
-1.0%
Financial 15
16,657
+0.2%
All JSE data delayed by at least 15 minutes Iress logo
Company Snapshot
Editorial feedback and complaints

Contact the public editor with feedback for our journalists, complaints, queries or suggestions about articles on News24.

LEARN MORE
Government tenders

Find public sector tender opportunities in South Africa here.

Government tenders
This portal provides access to information on all tenders made by all public sector organisations in all spheres of government.
Browse tenders