Ramaphosa confident about economy‚ set to announce economic stimulus package
President Cyril Ramaphosa is confident that his economic plans will pull the country out of its first recession in nine years.
Speaking to journalists from the Chinese city of Hangzhou‚ where he visited e-commerce billionaire Jack Ma as he concluded his five-day visit to China‚ Ramaphosa said he was confident an economic-stimulus package he planned to announce soon would “lift the mood and investment prospects” in the country.
Ramaphosa‚ who has been in China since Saturday‚ began his visit with a meeting with Chinese President Xi Jinping on Sunday‚ where the two discussed trade relations between South Africa and China.
The meeting was followed by the Forum on China-Africa Cooperation on Monday and Tuesday‚ which was co-chaired by Ramaphosa and Xi.
But news that the South African economy had slipped into a technical recession on Tuesday‚ after Stas SA reported that the country’s Gross Domestic Product had shrunk by 0.7% in the second quarter of 2018‚ put a damper on Ramaphosa’s investment drive in China.
However‚ he said he was confident the economic picture would look different in the next quarter of the year.
“It’s disappointing that our GDP has shown a negative growth trend… but I don’t think we should be disheartened because it was largely driven by agriculture. At the agricultural level we had late rains‚ late harvest and I am sure that agriculture will bounce up and show growth in the next quarter‚ so all is not lost‚” said Ramaphosa.
“I don’t believe that a full recession will take hold in South Africa. Our economy is facing its own challenges that we have to respond to (and) government is going to be responding to the challenges that we’re facing. We’re finalising a stimulus package that we’ll be announcing to inject impetus and growth into our economy at a number of levels.”
Ramaphosa said he was confident the announcement would lift the mood in the country‚ as well as investment prospects and GDP growth.
His visit to China‚ he said‚ had boosted his drive to get local and international businesses to invest at least R1.3-trillion in the South African economy in the next five years.
He described his visit as a success‚ saying relations between Beijing and Pretoria had entered a golden era following frank discussions on what needed to be done to resolve the trade imbalance between the two countries.
China is South Africa’s largest trading partner‚ with bilateral trading amounting to $39.17-billion last year‚ but largely in favour of the Chinese.
The President said the Chinese had agreed to start importing finished products from SA and not just raw materials which they sold back to the country after processing them.
Ramaphosa also acknowledged that some Chinese businessmen had expressed concerns about their security in South Africa and that the matter would be addressed.
“This has been raised with us over and over. We’ve now reached a point where we’re saying we want to focus more sharply on the issue of security because it’s one of the constraints that impedes the flow of investments into our economy. People want to invest‚ but the concern they have about security is quite serious. We’re going to be addressing it directly through our cluster on security.”
Ramaphosa said Chinese dollar billionaire Ma‚ who owns e-commerce giant Ali Baba‚ had agreed to attend an investment conference in October.
He was also lobbying Ma to support South African SMMEs in the IT and e-commerce space.
Stats SA announced on Tuesday, September 4 2018, that SA has plunged into a recession with a surprise 0.7% contraction in the second quarter of the year. What does this mean for SA and its people?