Finance Minister Malusi Gigaba is expected to outline government’s inclusive economic plan of action on Thursday.
There has been an apparent trust deficit between government and business since a cabinet reshuffle earlier this year.
The Bureau for Economic Research (BER) revealed on Wednesday that there has been a reversal in economic prospects. In the first quarter business remained positive that South Africa’s economic fortunes would make a U-turn in 12 months’ time.
But the latest data reveals this view has reversed dramatically and this can mainly be attributed to the credit rating downgrades and the recession.
Economist Thabi Leoka says Gigaba will need to restore business confidence and clear his name.
Investment from corporate South Africa has been quite negative over the quarters so he needs to speak to corporate South Africa and instill confidence in them and also make sure that he bridges the trust deficit that I think has widened between government and business since the reshuffle at the end of March.— Thabi Leoka, economist
Again, I think the onus is on the minister to reassure and to explain his situation. Clear his name to business and South Africa , to those who are still doubtful that he is the best person for the job.— Thabi Leoka, economist
Leoka believes that this approach would work in Gigaba's favor although the party's sentiments on white monopoly capital hampers this.
Words such as white monopoly capital haven't also helped bridge the gap between business and government, so I think it is going to be difficult for him to convince business that he is on their side and he wants to collaborate with business to stimulate growth.— Thabi Leoka, economist
She says trying to stimulate economic growth in this period is going to be hard and clarity is needed on the country's economic policy.
We have just had the policy conference and in December members of the ANC will vote for policies they deem suitable, so for everyone i think its just a wait and see between now and then, also trying to stimulate economic growth is going to be very hard. I see why certain business members would wait and see for clarity in terms of policy.— Thabi Leoka, economist
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