National African Federated Chamber of Commerce and Industry (Nafcoc) statement on General Economic Conditions and Treasury Response to recession and credit rating down grade

Nafcoc has noted and welcomed the statement by the Minister of Finance following the downgrading of South African sovereign rating by Moody's. Moody's has still maintained the South African rating agency to investment grade albeit with negative outlook, perception of our economic situation and business confidence have deteriorated.

The synchronized credit rating downgrades, the recession our economy had currently entered, the increased unemployment rate is certainly going to make the task of recovery and rebuilding of confidence all the more daunting.

While we welcome the Minster's efforts to reassure the investor community and South African public at large, we found his reliance on consultation with established businesses bodies like Busa and high level bodies like BBC may be useful and indeed supported, the minister should also consider meeting engaging with small, cooperative and medium enterprises.

“We are still awaiting minister’s response to meet with Nafcoc to discuss the current developments and it is now urgent that we engage with the Minister" Said Mr Churchill Mrasi Vice President of Nafcoc

Minister Gigaba had outlined a series of interventions including recommitment to the current fiscal policy approach and maintaining continuity in Treasury, strengthening of the governance of SOE’s and scaling up transformation effort in key sectors like the financial services sector.

“The minister should realize that while the Macro -level and strategic interventions are necessary to restore confidence in the economy, they are by no means sufficient" commented Landiwe Mahlangu the Chief Economic Advisor to Nafcoc commented " Our view is that our economy will also needs much more micro and finer grained approaches and interventions to move the economy out of recession and restore business confidence" Added Mahlangu

While sectors like agriculture and manufacturing seem to show some buoyancy, we need to embark on a robust and practical approach to building inclusive growth. This inclusivity can be achieved by integrating the black small business and medium enterprises in the value and supply chains of key industries. This will however not happen by itself. If will have to managed and monitored on regular bases, something Nafcoc will raise sharply with the Minister.

 

Issued by Nafcoc Economic Desk