Finance Minister Pravin Gordhan delivers the 2013 budget speech in the National Assembly, Parliament. Picture: GCIS
Finance Minister Pravin Gordhan delivers the 2013 budget speech in the National Assembly, Parliament. Picture: GCIS

FINANCE Minister Pravin Gordhan appealed to the private sector on Thursday to accelerate investment in the economy to help pull South African out of its difficulties and play its "rightful role" in doing so.

He said in a briefing to Parliament’s two finance committees on the 2013-14 budget, released by the Treasury on Wednesday, that private sector investment was key to accelerating growth and employment, which he conceded was "not adequate".

The minister referred to observations made by the International Monetary Fund that the private sector the world over had been tardy in reassuming its role in growth, which had been taken over by the public sector during the recession.

The need for private sector investment was highlighted in the budget, which has forecast South African growth at 2.7% this year, 3.5% next year and 3.8% in 2015, still far below what SA requires to meet its daunting job creation challenges.

"The private sector is crucial for the job creation trajectory," the Treasury said in its briefing notes to MPs. It noted that real gross fixed capital formation grew 6.4% last year, but private sector investment slowed to 4.3%.

Public sector capital spending grew 11% during the first nine months of last year.

Economists have highlighted the risks of South Africa not achieving its growth targets and warned that they might not be met given the uncertainty of the global economic environment.

"The global economic recovery remains hesitant in 2013, with risk tilted towards slower growth due to high debt levels and the banking crisis, fiscal consolidation and policy uncertainty," the Treasury said.

Mr Gordhan said the government was managing the higher deficit — it is projected to widen to 5.2% in 2012-13 — in a manner which continued the policy of fiscal consolidation.

He believed that the Treasury had achieved the proper balance between consolidation and the promotion of growth.