Minister in the Presidency Jeff Radebe. Picture: GCIS
Minister in the Presidency Jeff Radebe. Picture: GCIS

THE government needed to intervene more decisively to accelerate the momentum of economic growth though the global environment was very "challenging", Minister in the Presidency Jeff Radebe said on Thursday at a media briefing.

Mr Radebe, flanked by Finance Minister Pravin Gordhan, briefed the media on the outcomes of a special Cabinet meeting held on Wednesday mainly to address the state of the economy and budget-related matters. Mr Radebe said the government would be seeking a consensus among business, labour and the government to create confidence and promote growth.

The Cabinet had endorsed stronger fiscal measures, which would be announced by President Jacob Zuma in next month’s state of the nation address and in Mr Gordhan’s budget on February 24.

Despite the challenging circumstances, Mr Gordhan dismissed suggestions that SA was heading towards a recession. He noted that the World Bank had projected SA’s growth for the next three years at between 1.4% and 1.6%.

The global economic context has deteriorated and the government took this and the domestic economic situation "very seriously", Mr Gordhan said.

"We are growing as an economy but we are not growing fast enough and not inclusively enough," the minister said.

"The world finds itself in an extraordinarily difficult environment," he said, noting that some commentators believed that this could endure for some time. SA as a commodity producer was particularly hard hit by the decline in demand and prices for its products.

"We have our own difficulties. We have structural problems. Government is very determined to bring all South Africans together to confront these challenges. As government, we are not sitting back, and are working hard to take SA in a different direction and create more optimism."

Mr Gordhan urged business to seized the opportunities of a depreciating rand to export more, particularly to the African continent.

He dismissed the suggestion that finding consensus among business, the government and labour was a "desperate ploy" in the face of the enormous challenges facing the country. He gave the assurance that the government would do everything possible to stabilise the economy and there was no need for South Africans to take their capital abroad.

Mr Radebe noted that the US recovery would result in a rise in interest rates and the "significant volatility" in capital markets, which had hit the rand hard in recent weeks.