Treasury will contribute a small part to economic growth - Godongwana

Treasury will contribute a small part to economic growth - Godongwana

Newly-appointed Finance Minister, Enoch Godongwana says Treasury will not be able to recover the economy on its own.

Finance Minister Enoch Godongwana National Assembly
YouTube: Parliament of the Republic of South Africa

Godongwana was answering questions in the National Assembly on Wednesday alongside other ministers in the Economic Cluster. 

It was his first time in Parliament since he was appointed replacing Tito Mboweni. 

The Covid-19 pandemic and the recent looting and unrest in KwaZulu-Natal and Gauteng have had a devastating impact on the economy and its growth prospects.

The looting and unrest are estimated to cost the economy at least R50 billion.

Godongwana said this amount is preliminary as more work is being done to assess the total monetary impact. 

"It's not that National Treasury in isolation from government and major efforts by all South Africans can ensure recovery to this economy, Treasury will contribute a small part to that. We will mobilise all South Africans to work together and ensure this economy is brought to better performance," said Godongwana

In the second quarter of 2021, the country's gross domestic product (GDP) expanded by 1.2%.

A growth similar to that of 2017 according to Statistician-general Risenga Maluleke.

Godongwana said the real impact of the unrest will reflect on the third quarter GDP results. 

"National Treasury suggests that the unrest could have little under 1% point from the GDP growth in 2021. In addition, these impacts could be lasting on unemployed, and this could persist beyond 2021," he said.

Accelerating the implementation of the economic recovery plan, focus on growth and job creation reforms, maintaining fiscal sustainability and an emphasis on capital expenditure rather than consumption expenditure is among the list of key remedies Treasury is focusing on. 

Godongwana said the Public Procurement Bill, which will soon be brought to Parliament, will assist in appointed a Public Procurement Regulator who will oversee all government supply chains and deal with corruption.

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