Recession: SA must do everything to attract investment - Maimane

Bad decision making is at the heart of SA's recession DA leader Mmusi Maimane said, when he unveiled the party's strategy to turn the country's economy around at a press briefing on Monday.

Maimane highlighted several 'bad policies' that he cited as being the cause of the country entering its first technical recession since 2009.

Among these were government's plans for land expropriation without compensation and the proposed nationalisation of the SA Reserve Bank.

Stats SA announced on Tuesday that the country had entered a technical recession after the gross domestic product contracted by 0.7% in the second quarter. This followed a restated contraction of -2.6% in the first quarter. 

“This is our first recession since 2009 where Africa’s largest economy is now seen as the weakest. It has a lot to do with South Africa’s decision making,” said Maimane at a briefing in Johannesburg.

The current land reform policy would discourage investors, he said. “South Africa must behave as a nation that is looking for investment, we need to do everything to attract investment."

He said that overly taxing South Africans would not lead to economic prosperity. “No nation can tax itself to prosperity. Consumers cannot spend and invest in the economy when they are being overly taxed."

The DA leader that the party had tabled seven immediate solutions which would be presented at a debate in the National Assembly on Wednesday. These included proposals that the current the land reform policy be scrapped, cash-strapped airline SAA and power utility Eskom be partly privatised, and that government's "bloated" cabinet be cut.

Maimane said these proposals presented a different approach which would promote investment.

“Our plan will make it easier for entrepreneurs and business to succeed and thus create job creation,” he said. 

What are China's conditions?

Maimane has also expressed concern about China’s recent loan to Eskom, saying the state-owned enterprise poses a financial risk and has "hundreds of billions" in debt.

“The domestic lending line is not open to Eskom because banks are disinclined to invest in these sectors, therefore what special arrangement is China making?” Maimane asked.

“We cannot hand over our sovereignty to China under terms and conditions ... We cannot be held ransom by Eskom. If it defaults, it will have dire political, social and economic consequences."