The 3.3% growth achieved in the second quarter may have got a few people excited, said Gordhan.
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He says South Africa needs to look at what kinds of industries and sectors would take us into a different era of growth. He remarked that the different sectors had worked hard to present a national front to rating agencies earlier this year.
The affair has rattled markets in Africa’s most industrialised economy, which faces the risk of ratings downgrades later this year.
Gordhan told CNBC that investors needed a certain level of certainty and confidence to invest in the country’s economy. “It’s gone from more or less inevitable to being a possibility”, said John Ashbourne, Africa analyst at Capital Economics.
If the ratings agencies downgrade South Africa to junk status‚ the cost of borrowing money to fund South Africa’s economy and infrastructure will skyrocket and many investment funds will have to pull money out of the country.
Meanwhile, the World Bank predicted that South Africa’s gross domestic product (GDP) will grow by only 0.6 percent this year. Investment in the real economy will drive growth and job creation and inspire hope in young people, he added.
More and more people felt they were not benefitting from growth and remained sidelined‚ he said‚ adding that businesses had to work to ensure that youth unemployment of nearly 50% was addressed‚ which required “radical” change.
The Commission, which as an independent body that advises government with regards to all things financial and fiscal, has been accused of this improper behavior by undisclosed parties.
Treasury also plans to stick to its deficit and debt targets set-out in a budget delivered in February, Gordhan told business leaders in Johannesburg.
He said would also seek to protect social spending on South Africans who are unemployed and live in poverty.
Gordhan said it was critical for SA to continue building and strengthening its institutions.
Despite the lingering worry about a probe by the Hawks into the minister, dating back to his time as commissioner of the South African Revenue Service, Gordhan appeared upbeat, urging investors to “create a positive narrative about our country”. “Consumer confidence is crucial for investment and for increased economic activity”, he said.
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For its part, the government would do as much as possible to remove areas of uncertainty.
