ANC STATEMENT ON 2022 Q1 GDP DATA
The African National Congress (ANC) welcomes the announcement by Statistics South Africa that the economy grew by 1.9% in the first quarter of 2022 which represents a second consecutive quarter of upward growth. The performance has exceeded expectations. We also note the fact that the size of the economy is now at pre-pandemic levels, with real GDP slightly higher than what it was before the Covid-19 pandemic.
This is a clear demonstration that the implementation of the Economic Reconstruction and Recovery Plan (ERRP) is starting to yield the desired results. As a governing party, we are satisfied with the pace of implementation of the commitments made on the ERRP though the impact in certain areas will take time to come into effect.
We remain of the view that reindustrialization and localization are the key to economic growth and job creation. The positive growth recorded on eight of the ten industries in the first quarter is evidence of strong recovery of the production side of the economy. Since the fourth quarter of 2021, the manufacturing has been on the growth trajectory. In the first quarter of 2022, manufacturing the key performer hence manufacturing was the second largest job creator, creating 263 000 jobs. This increased performance in manufacturing output was mainly driven by a rise in the production of petroleum and chemicals, food and beverages, and metals and machinery.
Other sectors that have made a positive contribution to the GDP growth include Finance, real estate and business services, as well as trade.
We also note with concern that both mining and construction contracted in the first quarter. Mining remains a key contributor to the South African economy. We believe that mining is a sunrise rather than a sunset industry. It is mineral products that include chromium, copper, major battery metals such as lithium, nickel, cobalt, manganese and graphite, platinum group metals, zinc, rare earth elements and aluminium that are key to green energy technologies. We cannot speak of energy transition without discussing the role of mining.
Thus, government’s drive to increase investments in mining must be intensified.
The ERRP identified infrastructure investment as the flywheel of our economic recovery and disappointingly construction saw its fourth consecutive quarter of contraction, with underwhelming results reported for residential buildings and construction works. We are however, encouraged by the increase in economic activity related to non-residential buildings. We urge government to increase its efforts to grow the pipeline of bankable infrastructure projects to crowd-in infrastructure investments.
The total demand in the economy, which was negatively impacted by the July 2021 unrests and Covid-19 pandemic, is on the increase. This is evidenced by the growth in household consumption, government consumption, gross fixed capital formation, exports and imports in the first quarter.
All indications are that the South African economy is on a strong recovery trajectory and on track to outperform projections for this year.
ISSUED BY THE AFRICAN NATIONAL CONGRESS
Chairperson: Economic Transformation Sub-Committee
National Spokesperson 071 623 4975