EFF statement on Zuma’s nonsensical outlook on the country’s economy
13 August 2015
The EFF notes with worry President Zuma’s impromptu statement on the state of the economy and state owned entities. The president came out of the woodwork and made a surprise statement to the nation in which he made the alarming statement that his government’s 9 point plan has put the country’s economy back on track. He portrayed a glowing picture of a growing economy and SOEs that are on their way to recovery, same time the South African Reserve Bank Governor was issuing alarms about the looming economic catastrophe ahead.
The EFF dismisses the President’s entire outlook on the economy, but of particular note, we dismiss his assertion of a 3% revised GDP growth projection. The EFF finds this revision confusing because all other key indicators are showing a downward trend, and the evidence is there for everyone to see. Amongst some of the indicators, here are a few interesting ones:
1. Projected growth in emerging market economies has been revised downwards for 2015
2. Published Eskom results reflect a deeper crisis than they are projecting, and this is in spite of the government bailout. The ripple-effect of the economy through a deepening energy crisis will be devastating.
3. The Rand is at a 14-year low while continuing to depreciate. Its negative effect on inflation in an already upward interest rate cycle cannot be ignored, including its continued volatility.
4. The rate of export growth is expected moderate which will be exacerbated by the impending crisis in the mining sector.
5. Private sector credit growth has slowed down, which signifies a decreasing consumer demand in the economy.
6. Bulk of R14 404 million national revenue received in July was from sale of government stake in Vodacom to fund Eskom, mainly its operations.
7. Key State-Owned Entities (SOEs) in general are struggling financially, and operationally and having little positive impact in the economy besides draining public resources.
8. Widening budget deficit, to be exacerbated by the R1 trillion nuclear deal and the $10 billion New Development Bank commitment, in an environment of negative economic growth outlook.
In this environment, it would be interesting to find out where the President gets his incredible 3% growth from. National Treasury has cuts its growth forecast even below a prevailing consensus to dismal 2% in 215, 2.4% in 2016, and 2.8 in 2017, this has not been revised. We caution the President not to bolster his bruised imaged by misleading the country and inflating growth projections, thus painting a rosy picture when in fact, the opposite is the truth.
We also question the timing of the President’s impromptu appearance after he was humiliated in parliament by the EFF who exposed his limited knowledge of the country’s economic status. Majority of issues raised by the President relates to things that government did in 2014, and has nothing to do with the 1st quarter of 2015.
The president went further to increase the confusion by starting numerous action that the government will be undertaking going forward in a press statement meant to report feedback. He has recently been on a roadshow in a mission of damage control against this exposé. We see you Mr President. The country is aware that the President is incapable and incapacitated to deal with tougher questions of the economy and the fiscus.
It is also interesting that he made this impromptu statement, but already had his Ministers of Finance and Presidency to answer the questions, not himself. Why? The entire country knows the answer to this question and the ANC’s attempt to camouflage this fact was to no avail. The President is an embarrassment to the whole country including the majority in the ruling party and the most effective way to address this national embarrassment is to remove him.
Statement issued by the Economic Freedom Fighters, August 13 2015
