Risk 'high' for SA’s economic recovery: Godongwana

Economic growth is projected to be 2.1 percent this year, dropping to an average of 1.8 percent over the next three years, Enoch Godongwana said as he tabled the government's annual budget statement.

"Our economic recovery has been uneven and risks remain high," he said. "We must proceed with caution."

Restrictions imposed last year and in 2020 to control the spread of Covid-19 brought most economic activity to a standstill and plunged millions of people into unemployment.

With more than 3.6 million Covid cases and nearly 99,000 fatalities, South Africa is the continent's hardest-hit country.

Godongwana said his budget was aimed at striking "a critical balance between saving lives and livelihoods, while supporting inclusive growth".

South Africa was also rocked by riots in July last year which wiped more than $3 billion off the economy's books after businesses were looted in the two most populous provinces of Gauteng and KwaZulu-Natal.

The riots, sparked by the jailing of ex-president Jacob Zuma for refusing to appear before graft investigators, coupled with the fallout from the pandemic, threw millions more people out of work.

Unemployment rates range from 35 percent of the general population to 65 percent among young people.

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Nearly half of the population of 59 million are now receiving monthly payouts due to poverty and joblessness. 

The government will set aside some 76 billion rand ($5 billion) for job creation programmes in the medium term.

Massive state corruption and cronyism under Zuma, laid bare in a series of reports since January, have played havoc with growth forecasts.

"Corruption is a major blight on our country," said Godongwana. "It has lowered our economic growth potential, made us fiscally more vulnerable, and severely weakened the capability of the state."