JOHANNESBURG, March 11 South Africa is more
focused on lifting economic growth and reducing inequality than
cutting spending to appease investors, Finance Minister Pravin
Gordhan said on Monday.
Gordhan also told an investment conference the government
was concerned about volatility in the rand, which has hit
four-year lows against the dollar on worries about the impact of
strikes in the key mining sector.
Africa's top economy last month cut its 2013 growth forecast
to 2.7 percent from 3.0 percent, with lower revenue seen leading
to a wider budget deficit of 4.6 percent of GDP for 2013/14.
South Africa would maintain social spending at levels that
improved living conditions for millions of mainly black people
still mired in poverty nearly two decades after the end of
apartheid, Gordhan told a Bank of America Merrill Lynch
"We don't want to impose austerity on the South Africa
population, and so whilst we are lowering the rate at which
growth is taking place in our expenditure, we are not breaking
into negative territory," Gordhan said.
"Our focus needs to be in the growth area and both
government and the private sector need to focus our minds on
that. That (GDP) number 2.7 needs to grow beyond 3.0 percent as
quickly as we can."
Moody's, Fitch and Standard & Poor's have all cut South
Africa's credit rating in the last few months, citing an
uncertain domestic outlook worsened by wage strikes which have
hit output in the world's largest platinum producer.
On Monday diversified miner Exxaro Resources said
workers at two more mines in South Africa had gone on wildcat
strikes, bringing the total number of mines affected by work
stoppages to five.
"In the mining sector one of the lessons over the last few
months is clearly that we cannot see digging shafts as separate
from the labour relations system and the living conditions in
which our people find themselves," Gordhan said.
The labour strife which has persisted since August has
translated into volatility in financial markets, with investors
quick to pull out of the local bonds and sell the rand on news
of new boycotts.
"Generally we don't want to see the kind of volatility that
we see at the moment," Gordhan said, blaming this partly on the
financial crisis in the euro zone, which absorbs about a third
of South African exports.
"Not resolving the banking crisis in Europe as quickly and
as assertively as the Americans have done is doing a huge amount
of damage to the globe."
(Reporting by Stella Mapenzauswa; editing by Ron Askew)