(Updates with finance minister’s comments from the third paragraph.)
Aug. 30 (Bloomberg) -- South Africa may take as long as three years to regain about 1 million jobs lost following the country’s first recession in almost two decades, Finance Minister Pravin Gordhan said.
The global financial crisis pushed Africa’s largest economy into recession in last quarter of 2008, and it only returned to growth in the third quarter of 2009. The economy expanded an annualized 1.3 percent in the second quarter of this year, its slowest pace in almost two years, the government statistics agency said in a report released today.
“South Africa will probably take another two to three years to get back to where we were before the recession,” Gordhan said in a speech at the University of Cape Town today. The latest growth data was “disappointing to say the least. Hopefully we can still get to beyond 3 percent” growth this year.
Growth is lagging the government’s targeted annual expansion of 7 percent that it says is needed to meet a pledge to create 5 million jobs in the next decade. That is forecast to reduce the jobless rate to 14 percent from 25.7 percent currently.
Measures taken by the government to bring more of the black majority into the mainstream economy are not working and only served to benefit a small elite, Gordhan said.
While South Africa is constantly reviewing its tax laws, it currently has no intention of emulating Australia’s plans to increase taxes on mining companies, he said.
“The mining sector is important in the South African context,” he said. “Clearly it’s not playing as full a role as it should be playing, both in terms of exports of minerals and also in terms of minerals” processing, and more needs to be done to encourage investment in the industry.
--Editors: Ana Monteiro, Leon Mangasarian.
To contact the reporter on this story: Mike Cohen in Cape Town at firstname.lastname@example.org.
To contact the editor responsible for this story: Andrew J. Barden at email@example.com.