SA economy, Gordhan’s progress in focus

South Africa’s battered economy is expected to come up for discussion during this week’s cabinet lekgotla.

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Johannesburg - The cabinet lekgotla is expected to discuss the state of the economy and the outcome of the local government polls this week.

The assessment of the performance of government and its policies with the state of the declining economy will start tomorrow and end on Friday.

The government has not outlined its agenda, but Minister in the Presidency Jeff Radebe will give the media the outline of key themes for discussion tomorrow.

But the battered economy is expected to come up for discussion and the review of the work done by Minister of Finance Pravin Gordhan and business with labour.

Two months ago, this team announced key intervention areas including propping up small businesses to reignite growth in the economy.

The economy declined by 2 percent in the first quarter of the year and Statistics South Africa is expected to release results for the second quarter in the next two weeks.

However, there is serious concern on the poor performance of the mining sector, which has shed 60 000 jobs in the past six years.

Gordhan had called for diversification in the economy as the mining sector was bleeding in recent times.

Investment in infrastructure is one of the key drivers for jobs and growth in the economy.

The government has invested R4 trillion in infrastructure projects in the next 15 years.

The economic cluster is expected to give new direction on the economy and how to avoid a potential downgrade in December.

Despite escaping a downgrade in June South Africa is not out of the woods yet, and a downgrade could hit the country hard.

It could lead to more investors leaving the country and make it difficult for South Africa to borrow in international markets.

This would further impact on job losses.

The state of municipalities is also expected to come up for discussion following the polls two weeks ago.

Economists had expected a tough battle for the ANC to keep the Gauteng metros and Nelson Mandela Bay.

But the question of hung municipalities has not been resolved, with Co-operative Governance Minister Des van Rooyen warning of invoking Section 139 of the constitution and intervening if this was not resolved by Saturday.

THE STAR