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Enoch Godongwana warns of poor economic performance after Stats SA reveals 1.5% contraction

Finance Minister Enoch Godongwana during the tabling of the medium term budget policy statement in November. Picture: Phando Jikelo/African News Agency (ANA)

Finance Minister Enoch Godongwana during the tabling of the medium term budget policy statement in November. Picture: Phando Jikelo/African News Agency (ANA)

Published Dec 7, 2021

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Cape Town - Finance Minister Enoch Godongwana says the economy was under pressure after it contracted by 1.5% in the third quarter, saying a lot was needed to get it on the upward trajectory.

Godongwana, who was addressing the National Council of Provinces after Statistics SA released its figures for the third quarter on Tuesday, said more needed to be done to get the economy right.

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He said unemployment was also a major challenge in the country.

The economy had been struggling in the last few months and had shown signs of recovery in the first half of the year.

The July unrest in KwaZulu-Natal and Gauteng had seen the economy take a knock. This was after thousands of businesses were destroyed during the riots and billions of rand lost.

Godongwana said he was also in contact with Health Minister Dr Joe Phaahla as the fourth wave was hitting the country.

This has seen an increase in infections.

“We are debating this bill in the context of the fourth wave of the pandemic whose cost in terms of human life and resources is unknown. Of course, we are debating with the Minister of Health its implications from a resource point of view if resources are required provisions will be made in the main Budget,” he said.

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“The second aspect is the poor performance of the economy,” said Godongwana, adding that during the first and second quarters, the economy had shown positive growth.

But in the third quarter, it contracted by 1.5%.

“I am concerned that growth has implications for revenue that we collect. The third point chairperson is the level of crime in our economy, which is a matter that needs serious attention. As we speak, the coal industry has not been able to move because of cable theft. It lost about R15 billion of revenue because they couldn't shift coal to Richards Bay. That has got implications on our revenue forecast,” said Godongwana.

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