Disappointing GDP numbers highlight need for urgent reform, says Minerals Council

SOUTH Africa’s disappointing fourth quarter GDP numbers highlighted the need for emergency implementation of structural reforms, said the Minerals Council South Africa which described 2019’s 0.2% growth in GDP “anaemic”.

StatsSA data published yesterday showed the economy was in a technical recession. The 1.4% retraction in GDP growth followed a 0.8% retraction in the previous quarter and represented the worst economic performance since the 2009 financial and economic crisis.

The mining sector showed marginal growth in the fourth quarter, along with finance and personal services, but in real terms for 2019 mining GDP contracted 1%. In addition, the volume of mining production shrank last year mostly owing to Eskom load-shedding

Minerals Council data show that physical mining production declined in 2019 by 1.4%, and mining’s contribution to GDP shrank by 1.9%. This is a decline for the second consecutive year, the council said.

“The situation demands the rapid implementation of remediation measures,” said Roger Baxter, CEO of the Minerals Council. “These include urgent steps to stabilise the fiscal situation, including the implementation of the reduction in state spending as outlined in Minister Tito Mboweni’s budget speech,” he said.

it called again for the liberalisation of the energy sector and said the “painful work” of fixing Eskom should be allowed to proceed unhindered.

“More specifically, it is critical that government continue the work to open the electricity sector to private generation for own use, that greater policy and regulatory certainty are promoted and that urgent steps are taken to reduce red tape, deal with crime and to foster greater investment in the economy,” he said.