Nene calls for calm as Ramaphosa dodges recession, lauds China
President Cyril Ramaphosa fielded questions from Chinese media in Beijing on Tuesday night at the end of the FOCAC summit, but steered clear of touching the burning issue of SA's economic recession, which may have put a damper on the strides he made at the summit as he pushed for fair trade relations between China and Africa.
The government's official response to the headline grabbing report by Stats SA, released earlier just before noon on Tuesday, was left to Finance Minister Nhlanhla Nene, speaking only to SA journalists after Ramaphosa concluded his briefing.
Nene said the country was pinning its hopes of recovery from two successive quarters of GDP contraction on an economic reform package that Cabinet was drafting to address bottlenecks and barriers constraining the economy.
"The reform package by Cabinet [is] in the pipeline [and] we understand the impatience of South African public because we want things delivered as of yesterday. But some of these things could not be done overnight," said Nene.
He said the administration was racing against time and wanted to have what he termed confidence boosting measures ready before he presented the medium term budget policy statement to Parliament, likely towards the end of October.
"The pressure is too much but I think we are making good progress and some of these things cannot be implemented overnight. We are saying they are underway - not just in discussions but also in practical action," he said, citing interventions in mining as an example.
Nene pointed to a drop in agriculture as the main reason behind the economic erosion, saying the statistics were "entirely surprising because we did not think we will have second contraction [and] we were hoping for a moderate recovery".
Agriculture took a 29% knock, which a slight recovery in mining could not to offset, he said. The manufacturing sector also struggled.
"With what we are putting in place, stimulation of growth and a number of structural reforms are in the process of being finalised. We are positive that with that we should be able to turn things around".
Show of optimism
Ramaphosa was optimistic about SA's prospects, telling Chinese journalists that the Forum on China–Africa Cooperation was a huge success and "historic".
"It just consolidated the view that the relationship between China and Africa has entered a golden age," he said.
He said it was "a fantastic age of deep cooperation and beneficial partnership, where all of us look at win-win outcomes". He said China would continue to cooperate with various African countries on an equal basis and with deep respect for one another.
The president said the arrangement would refute and debunk a notion "propagated by people who are envious and jealous of this relationship that that it is a new colonialism".
"There is no new colonialism [because] this is a relationship that has its roots deep in history. We were all engaged in struggle against colonialists from the Northern hemisphere and we worked together side by side. Now Africa is independent and it is free to choose its partners.".
He lauded the $60bn of assistance and investments in Africa announced by his Chinese counterpart Xi Jinping on Monday. Ramaphosa said China and Africa had agreed that trade deficits needed to be addressed and China wanted to open its market to value added goods from Africa.
"So that is a wonderful partner to have. You do not have a partner that wants to be creating barriers and stopping others partners from trade".* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER