While the second quarter growth of 2.5% in GDP announced by Statistics South Africa (StatsSA) yesterday pulled us out of the technical recession, the economy grew by 1.1% year on year for the first 6 months of the year, which is lower than our population growth of around 2%.
It is clear from the numbers released by StatsSA that growth took place in the primary sectors instead of value adding sectors e.g. manufacturing. This is a clear indication that investor confidence is still very low, hence very low levels of production.
It is abundantly clear that politicians keep themselves busy with campaigning and have no interest in what is happening to the economy. They appear to be concerned only about protecting their own jobs and they do not really care about burning issues such as unemployment, inequality and poverty.
Due to the current state of affairs, it is anticipated that Government will have to borrow even more to prop up the fiscal deficit, and with money being more expensive as a result of our downgraded status, it will simply mean that less money will be available for critical issues such as education, healthcare, social grants, etc. The latter could mean that Government will be tempted to again look at increasing the tax burden on individuals.
In conclusion, the 2.5% GDP growth will provide very little hope for the more than 9 million South Africans who do not have jobs or have given up looking for jobs.
We need political leadership that cares about the country and its people.