Johannesburg - The ANC secretary-general, Fikile Mbalula, is adamant that the country’s economy is recovering and that load shedding will come to an end before the year is over.
Mbalula made these pronouncements while addressing ANC Veterans League delegates during its third national conference at the Birchwood Hotel in Boksburg yesterday.
He told delegates their meeting took place against a backdrop of changing economic outlooks both from domestic and global contexts.
“Both our economy and the global economy have just emerged from the worst challenges occasioned by the Covid-19 pandemic, which has been compounded by the geopolitical conflicts involving Russia, Ukraine and to some extent Nato.
“We have nonetheless made serious strides in the last seven months to turn around the economic situation in our country and some of the positive results are beginning to show.
“In June, Statistics SA reported that the economy is operating in positive terms and was growing at a modest rate of 0.4 percent. Similarly, Consumer Price Inflation fell to 5.4 percent from 6.3 percent in May,” Mbalula said.
He said StatsSA this week reported that the annual producer price inflation fell to 4.8% in June from 7.3% in May and the overall Producer Price Index fell by 0.3% month-on-month. This means that the cost of producing goods in the country is beginning to fall sharply.
“Both these trends in Producer Price Inflation and Consumer Price Inflation are positive indications that we are beginning to turn the curve in terms of stabilising the cost of living. This trend tells us that we are at the end of the current cycle of a sharp rise in the cost of food in the country,” he said.
Mbalula said one of the main points of focus has been to tackle the crisis of load shedding, saying this was because energy availability had significant implications for economic productivity, price stability, job stability and expansion, provision of healthcare services as well as safety and security.
“We have seen good improvements at Eskom so far. Already the severity of load shedding has fallen a great deal as we see improvements in plant performance across Eskom. More work remains to be done to raise the availability of energy to levels equal to and beyond the levels of national demand for electricity around the clock.
“We are convinced that we can put load shedding behind us by the end of December 2023 if comrades in government remain true to the Energy Action Plan adopted by the ANC NEC in February 2023,” Mbalula said.
He said the ANC had done some commendable work in improving the logistics network, saying earlier this month Transnet reported the completion of the Mamathwane crossing loop in the Northern Cape 30 days ahead of schedule, unlocking extra railing capacity for manganese exports.
“This rail extension is poised to take an estimated 40 540 trucks off the roads per annum. This is good for reducing the volumes of manganese to be transported, reduce the damage caused by volumes of trucks on our roads infrastructure and essentially reduce the costs of transportation.
“We have to sustain and accelerate this performance to improve especially the railway system in the country. This is important for both goods and passenger transportations services as critical levers of lowering the cost of living in South Africa,” he said.
Insisting on the positive outlook, he said the South African Reserve Bank announced last week that it was keeping the Repo Rate unchanged at 8.25%, saying that was in recognition of the improvements in both global and domestic goods inflation, as well as the relative improvements in energy supply that have led to improved productivity in the economy.
“Importantly, the Reserve Bank warned us that we must sustain improvements in energy supply and the logistics system as these two factors pose medium to long-term risks to our inflation outlook. Disruptions in electricity supply and weaknesses in the logistics network for the transportation of goods impose unnecessary additional costs to the business sector and these costs are inflationary as they are factored into the final price of goods that the public must pay,” Mbalula said.
He said the ANC agrees with that perspective and had called on all their comrades in government to continue working tirelessly to improve electricity supply and logistics.
Mbalula insisted that load shedding would end by December.