POLITICAL NEWS - In reaction to the latest gross domestic product (GDP) figures released by Stats SA on Tuesday, both of South Africa’s biggest opposition parties have used to opportunity to once again push their respective economic plans for the country.
According to Stats SA, the economy contracted by 1.4% in the fourth quarter of 2019, which follows a contraction of 0.8% in the third quarter of last year.
The Economic Freedom Fighters (EFF) labelled this development something that happens “when the capitalist establishment and their media representatives are deliberately falsifying the true state of South Africa’s economy under Cyril Ramaphosa and Tito Mboweni”.
The EFF went on to caution that in their view, “the neo-liberal policies of Ramaphosa and the austerity measures imposed by Mboweni” will continue to worsen the country’s economic conditions as well as things like unemployment rates, poverty levels, inequality and the tax base from which the South African Revenue Service collects the money used for the provision of services.
The Democratic Alliance (DA) on the other hand simply quipped “‘economic tinkering’ is not a reform strategy”, and declared that South Africa urgently needs bold structural reforms that will drive competition and investment in the energy sector, do away with the outdated model of monopolistic SOEs and reduce reliance on debt to fund consumption.
In their statement, the EFF drove home their agendas of land reform, changes to state procurement processes and local trade policy, and promised to “join forces with all progressive forces in South Africa to reject the misdirected energy of the current leadership”, while the DA called for the decision to allow municipalities to buy electricity directly from IPPs to be expedited and urged the ANC to help support their proposed fiscal responsibility Bill.
“The Eskom crisis is slowly but surely killing the economy. The economy must be freed from the dead-weight of the failing state. This is especially the case in energy.”
The official opposition concluded by once again heralding their proposed three-year Emergency Solar Rebate (ESR) that would offer tax rebates for solar systems installed at residential properties.
All this despite Stats SA’s explanation that the main culprits responsible for hindering economic growth include the transport and communications industry, which shrank by 7.2%, and contributed to the 1.4% fall in GDP.
The largest sector to contribute to South Africa’s recession was construction, which has declined for six consecutive quarters. However, agriculture also proved to be the economy’s main drag-down factor in 2019.
The manufacturing industry dipped by 1.8% and agriculture fell by 7.6%, owed to late rains and heatwaves. The electricity, gas and water supply industry also bombed in the fourth quarter.