Zuma's ANC to blame for economic decline
27 May 2014
Statistics South Africa (StatsSA) today reported a 0.6% decline in the real Gross Domestic Product (GDP) during the first quarter of 2014.
This is a shocking announcement. It means that South Africa has actively become poorer in the last three months and it is further evidence that South Africa is moving backwards under Zuma's ANC.
Many will cite the strike in the platinum sector as an aggravating factor, but the reality is that there are bigger underlying structural factors that have contributed to the decline. Yes, the strike has had an economic impact - and government has done little to address the situation on the platinum belt. But the true causes relate to the shocking policy inconsistency of Zuma's ANC.
Just a few days ago, the President announced at his inauguration that he would be pursuing the NDP, only to commit minutes later to "radical economic transformation", hinting at measures much more extreme than those proposed in the NDP. This kind of inconsistency, exemplified by his double-talk on inauguration day, is the root cause of our economic problems. Zuma's ANC does not have a consistent plan to grow the economy and create jobs. On top of that, we have creeping corruption and an increasingly bloated civil service.
The result is a cash-strapped government facing a tough economy on uncertain policy terms. The results are showing clearly with a decline in economic activity and increasing unemployment.
It serves as a severe warning to the President that the time has come to stick to the NDP and implement it properly. The appointment of anti-NDP ministers such as Ebrahim Patel and Rob Davies are extremely worrying in this regard.
Government needs to start by cutting corruption and wasteful expenditure. We need to invest more in education and job creation initiatives like the Youth Wage Subsidy and productive infrastructure investments to facilitate growth.
Zuma's new policy-confused cabinet is a serious risk to South Africa's future economic prospects. We can only hope that they are able to get their house in order before we slip into recession.
Statement issued by David Ross, DA Shadow Deputy Minister of Finance, May 27 2014
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