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Growth path critical for economy and job creation – MEC Phosa

26 November 2010

MEC for Finance, Mrs YN (Pinky) Phosa expressed confidence in the economic prospects, this propelled by five consecutive quarters of positive economic growth that the country experienced recently.

Addressing the Mpumalanga Provincial Legislature on the 2010 Adjustments Appropriation, MEC Phosa said there is a “gradual improvement of economic conditions and the national economy is on track to achieve a real gross domestic product (GDP) growth estimated at 3 per cent this year, followed by 3.5 per cent in 2011.”

The forecast provincial growth rates for 2011 and 2012 are 3.5 and 3.8 per cent, respectively. The Gert Sibande District is leading the provincial economic recovery with an expected 4.9 per cent growth rate this year, followed by growth rates of 1.8 and 1.5 per cent for the Nkangala and Ehlanzeni Districts, respectively.

“The high levels of investment are necessary over the medium term to raise the economy’s growth potential in order to create employment and to continue to significantly contribute to counter the cyclical nature of our economy,” said MEC Phosa

Despite the more favourable economic growth and inflation outlook, employment trends appear to be lagging the domestic recovery.

MEC Phosa cautioned that South Africa’s present and forecast economic growth trajectory does not meet employment needs.

“Much faster growth is required over an extended period to significantly increase the labour absorption rate, reduce the high unemployment rate and achieve a more equitable distribution of income”, Phosa said.

The Mpumalanga’s economy shed 18 000 jobs since the end of the third quarter of 2009. In the third quarter of 2010 alone, the economy lost 9 000 jobs, with the highest job losses being in community services and private households. The official unemployment rate increased from 25.5 per cent a year ago to 28.4 per cent in the third quarter of 2010.

MEC Phosa said the design and implementation of a new Mpumalanga Growth Path is now critical to increase our economic growth rate and to rapidly reduce unemployment, poverty and inequality in our province.

“Our target should be to reduce the provincial unemployment rate to a level of 15 per cent in the next 10 years,” said MEC Phosa. This, she said, will require the creation of 70 000 new jobs annually and an economic growth rate of more than 6 per cent per annum.

We can only achieve this if government, business, labour and civil society join forces and work together– like we did during the recession and the FIFA 2010 Soccer World Cup. It is our firm belief that working together we can do more!


For more information, contact:

Letshela Jonas on 013 766 4243 / 079 500 0154 or Joseph Mkhonto on 013 766 4162 / 082 627 1750
Issued by Communications, Department of Finance, Mpumalanga Provincial Government