Kavith Harrilal
2 minute read
1 Jun 2009

Recession: Worst is over, says MEC

Kavith Harrilal

THE provincial government will not cut back its massive infrastructure-led spending spree as a result of the recession....

THE provincial government will not cut back its massive infrastructure-led spending spree as a result of the recession.

Finance MEC Ina Cronjé has dismissed “fear-induced speculation” that government spending and its involvement in the economy will soften as a result of the recession.

The spending plans in KZN, which amount to about R10,9 billion in the current financial year, are desperately needed as KZN is arguably the hardest-hit province in the country.

KZN shed a staggering number of jobs during the first quarter of 2009. The total number of employed people in KZN dropped by 117 000 during the first quarter of this year. This amounted to more than half the national job loss figure (208 000).

The official unemployment rate in KZN shot up from 20,8% at the end of 2008 to 22,6% — not far behind the national rate of 23,5%.

Manufacturing — a major sector within the KZN economy — recorded declines of about 22% over the past two quarters (Q4 2008 and Q1 2009). The sector has shed thousands of jobs in the province in recent months.

“Although South Africa is in a recession, there are signs that the worst of the crisis is over and that the world economy is stabilising and starting to recover.

“This suggests that the most difficult times should be behind us now, although the road to positive economic growth is still some months away.

“The strengthening of the Rand is evidence of the confidence that both international and local investors have in the country. The confidence is supported by the sound financial controls of government spending, and the sound economic policies practised by government,” Cronjé said.

Over the past four years the provincial government has injected a staggering R124,4 billion into the regional economy.

Some of the major KZN infrastructure projects relate to the Fifa 2010 World Cup, while others are aimed at increasing the country’s production and trading capacity, such as the Durban Harbour widening project.

Education and health infrastructure projects have also contributed to the economy.