PARLIAMENT, October 26 (ANA) – Deputy Finance Minister Mcebisi Jonas cautioned on Wednesday that political upheaval would deter investor confidence and economic growth.
“Bad politics have an impact on the economy and growth,” Jonas told a media briefing shortly before Finance Minister Pravin Gordhan delivered the medium-term budget policy statement.
Gordhan declined to answer questions about his prosecution on fraud charges widely considered to be politically trumped up, telling reporters to wait until “next week” when he was due to appear in court.
His deputy, however, continued: “And it is very clear that the slightest sign, any sign of political noise, is likely to have a negative impact on growth.
“And moving forward it is something that all of us — I don’t think it is just government, it is political parties, both business society and business, how we engage government — [must] try, to foster a better political climate and show that we take stability and business confidence very seriously.
“If we don’t do that we are likely to reverse many of the gains we have made so far.”
Gordhan said his medium-term statement was a careful balancing act on containing spending and debt but not killing the green shoots of economic growth, forecast at 0.5 percent for the current financial year.
“The risk is that taking too much out of tax, might slow down the economy. The risk is that if we go too far on the fiscal consolidation side, you damage a bit growth. So this is a measured, balanced, careful approach to fiscal consolidation so that all of these objectives can be met.”
He said it was important that those steering the country and economy were people who wanted inclusive growth, but said it was expected that the process would at times be tumultuous.
“There will be many distractions. It is not going to be a smooth road because vested interests in a 20-year-old democracy, as you know, develop.”
– African News Agency (ANA)
