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Nene: SA's economic growth has slowed

The finance minister says the local economy faces a number of challenges.

FILE: Nhlanhla Nene in Parliament. Picture: GCIS.

CAPE TOWN - Finance Minister Nhlanhla Nene has cited slow economic growth and poor commodity prices as two of the major factors challenging the local economy.

He said growth had slowed significantly and the economy was likely to grow at only one and a half percent this year, considerably lower than the two percent he forecast in his February budget.

He revised growth forecasts lower due to electricity supply constraints and confidence levels being dampened.

"Normal economic growth has slowed down, commodity prices remain depressed and unemployment has increased in many parts of the world."

He said state revenue was expected to fall by R7.6 billion this year and by R35 billion over the next three years.

Nene gave no hint of tax hikes. Briefing journalists ahead of his speech however, he said the government would act if it had to.

He stressed the importance of kick-starting the economy if the nation was to succeed.

"If we do not achieve growth, revenue will not increase and if revenue does not increase, expenditure cannot be expanded."

Nene said the national development plan was the answer.

"In these challenging circumstances, honourable members, we've had to devise our revenue estimates down for the period ahead. The medium term budget policies statement outlines the tough choices we have to make and challenges us to implement our national development plan with vigour."

As the student protests continued outside Parliament, the minister also focused attention on education.

"Our education and training capacity is not enough. We have to invest in quality improvements, and meet new skills requirements. Our levels of investment are also not enough. We have to modernise technology and compete effectively in the global economy."

He said special emphasis would be placed on two main areas.

"One is focused on basic schooling and the other on the mining sector. One is looking at the role of technology in the classroom, and the other modernising industrial methods and systems."

He went on to say that the future of South Africa's children was paramount.

"The important conversations in these laboratories are not about computer programmes or mechanical tools, they're about our children and how we value their future. They're about men and women who work in adverse conditions and on whose productivity we all rely."

The minister's speech was delayed when EFF members interrupted proceeding, saying Nene's mid-term budget speech must not go ahead amidst student protests.

Speaker Thoko Didiza ruled that the speech would go ahead despite calls by the EFF for the postponement.

A vote was held, with the result in favour of the speech going ahead.

But the EFF continued to protest, with members chanting 'Fees must fall'.

Didiza then announced that security was being called in and members were removed and taken outside.

WATCH: EFF members thrown out of Parliament

(Edited by Shimoney Regter)

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