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South Africa’s president Cyril Ramaphosa has said the government will conclude a clear economic growth strategy in the next few weeks.
“Building on the stimulus and recovery plan, the government will finalise a clear economic growth strategy within the next few weeks,” the President said this in his newly launched weekly electronic newsletter dubbed ‘From the Desk of the President.‘
Ramaphosa through the newsletter will be addressing challenges and issues facing the country and how the government is working to tackle them. The newsletter will be published on a weekly basis.
In his first newsletter, Ramaphosa reiterated on the need to have a growth plan to rescue the weak economy. He noted that this year, South Africa would record a lower than expected growth and even lower than what the country needs.
This year, he noted, “government finances were stretched about as far as they can go, and several industries were looking at cutting jobs.”
Massive layoffs have been recorded n the Southern African country in 2019 with the most affected sectors being manufacturing, banking, and construction. Much of the job losses in the banking sector has been blamed on digitisation.
Notably, he also mentioned the changes taking place in state-owned entities which he said: “give people confidence that we can restore the credibility and integrity of the State.” State entities like Eskom, SAA have been dependent on government bailouts to remain afloat.
In an ideal situation, government bailouts are meant to provide financial support to state corporations facing financial difficulties or bankruptcy or help improve the financial performance of SOEs. However, for a number of SA’s state-owned entities, that has not been the case.
Despite severally government bailouts, SOEs like Eskom have continued to perform dismally. The debt-ridden power utility this year recorded its largest-ever financial year loss for the year ending March 2019, even after receiving numerous government bailouts.
The utility’s crippled financial and operational situation continues to pose a huge threat to South Africa’s already weakened economy. The financial rescuing of the entity by government and the huge losses it has continuously recorded has taken a heavy toll on the Southern African country’s economy and fiscus.
In his address today, Ramaphosa spoke about the progress of improving the condition of SOEs and much specifically he touched on Eskom. He said, “Much work is underway to restructure state-owned enterprises and ensure that they perform better in meeting the country’s needs. A clear strategy to place Eskom on a sustainable path of recovery is also being finalised.”
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