Investment into South Africa is welcomed by Cabinet

Minister in the Presidency, Jackson Mthembu, stated that the Cabinet is aware of the current economic state and investments into South Africa is welcomed.

“The President in the State of the Nation Address indicated that one of our key apex priorities is growth. There is no question about it. We must work towards growing the economy.”

Minister in the Presidency, Jackson Mthembu

What is the economic status of South Africa?

Mthembu’s comments are caused by Finance Minister Tito Mboweni’s proposal of additional life-line of R59 billion over the next two financial years to help the embattled power utility Eskom. Mthembu was responding to a question targeted at the status of the economy which in the first quarter of 2019 declined by 3.2%.

Mthembu said Cabinet is aware of the economic challenges the country faced. The Minister also introduced a Special Appropriations Bill aimed at assisting Eskom with additional financial support during a sitting of the National Assembly on Tuesday. 

What is the effect of Eskom’s additional funding?

The Minister’s proposal comes after President Cyril Ramaphosa announced during his State of the Nation Address in February that Eskom was in a crisis and required additional support to improve its balance sheet. Thereafter, Mboweni cautioned that the financial support would come at a significant cost to South African taxpayers. 

“Investments in a new plant, equipment and in expanded production creates new jobs and grows the GDP. The sectors where new production will take place are all within the sectors identified by President Ramaphosa in the SONA. South Africa is also a frontier for new sectors of investments such as the green economy, oil and gas shipbuilding and the oceans economy.”

Minister in the Presidency, Jackson Mthembu

Investment into the country is well needed

Investment into South Africa is well needed, Mthembu further stated that the country offers a combination of highly developed economic infrastructure, a vibrant emerging market economy and access to the fast-growing African continent market.

“Yes we know that we are not performing that well, that there are inhibitors that make other people not invest in our economy. We know that Cabinet and the various departments are confronting these inhibitors. We hope that these investments will continue so that we improve the performance of our economy.

Cabinet will have to be appraised on who the person is, this person will help to turn around the entity. There is urgency to stabilise Eskom,” said Mthembu”

Minister in the Presidency, Jackson Mthembu