JOHANNESBURG - Business Unity SA (BUSA) has said that economic data expected during this week, just before President Cyril Ramaphosa's State of the nation address (SONA) will confirm the dire crisis SA is in.
BUSA said that the following is pertinent in this regard:
- Mining is expected to contract 3.5% year-on-year, after a fall of 3.1% in November
- Manufacturing figures for December are expected to decline an annualised 4%
- Retail sales are only expected to grow by 0,6% for 2020
BUSA said that they have consistently appealed to President Ramaphosa and his government that they need to take hard decisions to attract investment and put the economy onto a sustained growth path.
"We have recognised, and applauded, some progress in areas of addressing corruption and rebuilding institutions, but have lamented the fact that there has been no movement on the economy, which is central to addressing the crisis we are in. SA is in the throes of a severe fiscal crisis. Because the economy won’t grow and SA is borrowing at high interest rates, unless the government cuts spending significantly it will be impossible to stop debt from rising inexorably. Three years from now, debt will have grown from R3-trillion to R4.5-trillion, according to National Treasury’s projections. Debt service costs will increasingly crowd out funds for education, health care and other essential services, inflaming the poor who are already up in arms over the government’s appalling service delivery," BUSA said in a statement.
BUSA said that they would like to see the following in the SONA:
- Urgent pronouncements on far reaching economic structural reforms, with the key aim of unleashing economic growth and attracting investments. These reforms must also ensure an inclusive economy and expedite legislation to enable this. o A clear statement that public expenditure will be tempered in the Budget to be presented on 26 th February 2020.
- This is in the context of addressing the fiscal crisis we are in. Other measures to address this must also be announced, including control of expenditure, tightening up procurement processes, reducing wasteful and irregular expenditure, etc.