The South African government has welcomed the International Monetary Fund’s (IMF) revised upward growth outlook of South Africa from 2.8% to 3.1% for 2021.
In a statement issued by the Ministry in the Presidency: Planning, Monitoring and Evaluation, said the upgrade affirmed the robustness of the country’s economy and positive economic interventions despite tough conditions.
The projected 3.1% growth follows a period where economic activity decreased by 7.0% in 2020 compared with 2019 due to the Coronavirus Disease (COVID-19) pandemic.
“Based on historical data, this is the biggest annual fall in economic activity the country has seen since at least 1946. Prior to the advent of the COVID-19 pandemic, economic activity in South Africa increased by 0.2% in 2019, following an increase of 0.8% in 2018,” reads the statement.
The annual real Gross Domestic Product (GDP) growth rate of 0.2% in 2019 was primarily led by increased economic activity in finance, real estate and business services, as well as general government and personal services.
The IMF growth projection revision is attributed to the additional fiscal support in large economies and the global roll-out of COVID-19 vaccines.
Vaccination roll-out programme
The Ministry said South Africa’s own vaccination roll-out programme holds the potential to further uplift and turn the economy around.
“Despite the challenges being experienced globally with access to vaccines, government remains confident that the vaccination roll-out programme will be implemented within the set timelines and in partnership with the private sector,” said the Ministry.
Government has secured 30 million doses of the Johnson & Johnson vaccine, 20 million doses from Pfizer, 12 million doses from COVID-19 Vaccines Global Access and 12 million doses from the African Union.
In addition, the authorisation of both the Pfizer and Johnson & Johnson vaccines by the South African Health Products Authority (SAHPRA) for emergency use in South Africa gives impetus to the vaccination roll-out programme as it moves to Phase 2 and also prioritizes workers from businesses that are essential for economic recovery.
Economic Reconstruction and Recovery Plan (ERRP)
Acting Minister in The Presidency, Khumbudzo Ntshavheni, said: “Government is confident that the economy will recover with the diligent implementation of the Economic Reconstruction and Recovery Plan (ERRP) and the vaccination programme through continued collaborative efforts of government and its social partners”.
She added that as the country gradually returns to normalcy, the ERRP has become a rallying point towards the eventual reconstruction and recovery of all sectors of our economy.
“Government is confident that the ERRP will rebuild the base of our economy and also believes that a full recovery is possible. All the targeted actions being undertaken by government will inevitably restore economic growth and protect the livelihoods of our people,” said the Ministry.
The plan has eight key priority areas of action to urgently stabilize and stimulate economic growth while building confidence and competitiveness. It also focuses our nation’s efforts to pursue new sources of growth as we work hard to rebuild and grow the economy.
Furthermore, the country’s R6.2-trillion spending envelope over the 2019-2024 Medium Term Expenditure Framework gives expression to the ERRP. Government has also committed to a R791.2-billion infrastructure investment drive which is South Africa’s fastest-growing area of spending.
As indicated by the IMF, government acknowledges that South Africa has a long road ahead.
“Our success requires all South Africans to come together in a social compact to embrace the reconstruction and recovery of our economy as a shared responsibility. By working together, we can create much-needed jobs, get our economy back on track and achieve economic dignity for all South Africans,” the Ministry said.