South Africa Establishes Fund To Support Companies Affected By Economic Slowdown

South Africa’s Economic Development Minister Ebrahim Patel says a multibillion rand fund has been established to support companies that were affected by the global slowdown.

The Minister announced this when he addressed the second day of the debate on the State of the Nation Address in the National Assembly on Wednesday.

The debate comes after the President delivered his State of the Nation Address to the nation in Parliament last Thursday, with an emphasis on a turnaround strategy to put the economy on a path of growth.

The Minister said South Africa was faced with new headwinds and storms and this required more to be done to turn the situation around.

He said to support industries in distress, government was working with the steel industry to stabilise production and reduce job losses and improve competitiveness.

“But we want something from them too – commitment to invest and modernize their plans.

“We are setting up a new R5 billion fund supported by the UIF [Unemployment Insurance Fund], and [Labour] Minister [Mildred] Oliphant is working closely with us on that to assist companies affected by the global and local slowdown,” Minister Patel said.

Africa becoming SA’s important trade partner

During the State of the Nation Address, the President emphasized the need to stimulate investment and announced the establishment of Invest SA, a one-stop shop set up to ease bottlenecks and review regulatory bottlenecks that make it difficult to do business.

The President said government was proud of the country’s top 10 ranking in the World Economic Forum competitiveness report with respect to financial services. He said maintaining and improving the country’s ranking is important to the nation’s competitiveness.

During his debate, Minister Patel said to support growth in jobs, government was working on taking advantage of opportunities in the rest of the continent.

“Last year for the first time, other African countries became our single biggest regional market, overtaking Asia. We exported R303 billion worth of goods to other African countries, supporting roughly a quarter million South African jobs.

“For example, half of the trucks we make in South Africa and that we export to anywhere else in the world go to other African countries. “Sixty percent of all the fruit juice that we export goes to other African countries,” he said.

The Minister said South Africa needs to work on deeper regional integration through public and private sector co-investment on infrastructure and on industrialization.

The Minister said, meanwhile, that Cabinet had prioritized the fast-tracking of 20 infrastructure projects to enable private sector investment and to improve the lives of all South Africans.

Meanwhile, Energy Minister Tina Joemat-Pettersson said while challenges remain with South Africa’s electricity supply, it has been over six months since load shedding was last implemented.

She said this was due to interventions that were made as well as the positive response of South Africans to use electricity sparingly.

The Minister said, however, that South Africa cannot afford to be complacent, and citizens should continue to use electricity carefully.

“We have invested time, and effort, and we are now getting results.”

She said government was fully aware that constraints to energy impeded private sector investment.

“We know that investors do not like uncertainty. We have been able to provide this certainty with our Independent Power Producer Programme,” she said.