(Soweto) – While there is no need for South Africa to approach the International Monetary Fund (IMF) for financial assistance, there is a need for prudency given the state of the economy.
Responding to a question at a post Cabinet media briefing on Thursday, Minister in the Presidency Jackson Mthembu said government is not approaching the fund for assistance.
The Minister’s comments come on the back of poor economic data, including the recent unemployment figures, which showed that unemployment rose to 29% in the second quarter of 2019 and gross domestic product fell by 3.2% in the first quarter of 2019 following an increase of 1.4% in the fourth quarter of 2018.
“While there is no need to approach the IMF, there is a need for prudent financial management in the public domain, probably also in the private domain. There is no plan in government to approach the IMF,” said Mthembu.
Following its fortnightly meeting, Cabinet expressed concern about the high levels of unemployment and low economic growth figures. It reiterated its commitment to address the structural challenges that continue to affect the performance of the economy.
In addition Mthembu said government will take the nation into its confidence to address matters facing the economy. The Minister said the plan which is in response to South Africa’s economic challenges is being finalised and will be “shared in two to three week’s time.”
Meanwhile, Cabinet also welcomed South Africa’s participation in the 18th Africa Growth and Opportunity Act (AGOA) Forum held in Côte d’Ivoire, which concluded on Tuesday.
AGOA is a unilateral US trade preference programme that provides duty-free, quota-free treatment for over 6 400 tariff lines from 40 AGOA-eligible sub-Saharan African countries, including South Africa, into the US market.
Cabinet said South Africa’s constructive and positive discussions with the US Trade Representative provide potential access to the US market and American investment in the economy, which will contribute to job creation.
In response to a question, Mthembu said there is still a need for South Africa to form part of AGOA.
“Yes, that’s why we were part of the meetings. We would like such support from AGOA to continue,” he said of the forum that was attended by Trade and Industry Minister Ebrahim Patel and his deputy Fikile Slovo Majola.
South Africa is the largest non-oil AGOA-beneficiary country exporting products such as automobiles and auto parts, agricultural products, chemicals, steel and aluminium products, among others.
Meanwhile, Cabinet welcomed the initiative between South Africa and Japan to combat plastic pollution by supporting the transitioning of the local plastic industry from conventional plastics to more environmentally sustainable alternatives.
Last month, the Department of Trade and Industry welcomed the R25 million Japan-South Africa collaboration project that is aimed at combating plastic pollution.
The three-year project, which was launched in Tshwane, aims to support the South African plastic industry to transition from conventional plastics to more environmentally sustainable alternative materials.