ANC ‘concerned’ about job creation as SA slips into recession

The party's Enoch Godongwana says the latest growth figures are a call to action for all South Africans to rally behind the dismal state of the economy.

FILE: Enoch Godongwana, chair of the ANC’s sub-committee on economic transformation, addressing the press predominantly on land appropriation without compensation. Picture: Thomas Holder/EWN.

JOHANNESBURG - The African National Congress (ANC) says its concerned about job creation following the country's slip into a technical recession.

The party's head of economic transformation Enoch Godongwana says the latest growth figures are a call to action for all South Africans to rally behind the dismal state of the economy.

Godongwana says the technical recession is the result of a prolonged trend of slowing economic growth.

He says the government must immediately implement changes.

“Those include redirecting the budget priorities toward investment and infrastructure, in particular, focusing on the agricultural sector as well. So we made a number of areas in our policy statement listing a number of these interventions: cutting data costs, announcing the spectrum auction.”

The ANC says there's no correlation between the country falling into a technical recession and its position on land expropriation without compensation.

However, Godongwana says the party's position on land expropriation without compensation cannot be blamed.

“There is no correlation at all. The impact on agriculture is the delayed effects of the Western Cape drought.”

The ANC also says it's looking to the state, business and labour to work together to get the country out of its technical recession.

The ANC's economic transformation subcommittee is calling for interventions, including proposed tax credits for companies who invest in sustainable job creation.

Godongwana says industry players need to work together to lift the country out of this slump.

“We’re also going into a job summit next month. And we’re calling on government, labour and business to make concrete proposals on how to deal with job creation.”

Statistics South Africa released the figures on Tuesday, saying that this is the second drop, following a decrease of 2.6% in the first quarter of the year.

The largest negative contributors to growth in GDP were agriculture, transport and trade.

Africa’s most developed economy needs faster economic growth if it is to reduce high unemployment - currently at 27% - and alleviate poverty and inequality that stokes instability.

Unemployment is a hot-button issue ahead of national elections in 2019, and the African National Congress (ANC) has made repeated pledges that things will improve.

Statistics South Africa said agricultural output fell 29.2% in the second quarter, while the transport, communication and storage sector shrank 4.9%. Mining output grew by 4.9% and finance by 1.9%, however.

Stats SA said: “The widely recognised indicator of recession is two (or more) consecutive quarters of negative growth (real GDP quarter-on-quarter). South Africa experienced its last recession during the 2008–2009 global financial crisis with three consecutive quarters of economic decline.”

Additional reporting by Reuters.