STEEL: Finance minister’s medium-term budget policy welcomed
JOHANNESBURG – The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) welcomes Finance Minister Enoch Godongwana’s Medium Term Budget Policy Statement (MTBPS), which outlined South Africa’s path to economic and social recovery.
The year 2020 has been difficult for South Africa’s ailing economy which was not spared from the devastating impact of the global coronavirus pandemic. However, as noted by the Minister of Finance in his speech, the first half of 2021 indicates a path to recovery which has been characterised by lower interest rates, support from strong international demand and higher commodity prices.
This is in line with the significant green-shoots we have seen in the broader manufacturing sector and in the Metals and Engineering sector. The MTBP identified the need to manage our debt and for the faster implementation of structural reforms. These should create an environment for investment growth to ensure a fast-growing economy.
As one of the sectors which form the backbone of the South African economy, the Metals and Engineering sector remains a crucial supplier of inputs into major sectors such as construction, mining and other manufacturing sub-industries. It is thus an integral part of economic and industrial development in South Africa. Therefore, infrastructure opportunities through the Economic Reconstruction and Recovery Plan will assist the ailing sector in its recovery.
SEIFSA applauds the Minister for noting the continued commitment to the Infrastructure Fund which should unlock more infrastructure projects for implementation. It places special emphasis on fiscal sustainability and on economic reforms which are focused on improving competitiveness, productivity, investment and employment. These are extremely crucial for the South African economy, and for the Metals and Engineering sector in particular.
Against the backdrop of the coronavirus, the persistent erratic electricity supply, increasing cost of living and local steel prices and the increase in fuel prices poses challenges to economic recovery. Therefore, more work needs to be done as it would take time before the economy can be turned around.
