|South Africa's soaring trade balance deficit statement by Deputy-President (24 November 1998)|
South Africa’s worse than expected trade balance figures, which was announced yesterday, gives reason for grave concern. The cumulative deficit of R622,5 million for the first 10 months of 1998, compared to a cumulative; surplus of R3,8 million for the corresponding period; last year is frightening. There are furthermore indications that this condition will continue to worsen for the balance of the current fourth quarter, leaving a trade deficit for 1998 much larger than the market expected!
These newly released trade balance figures will undoubtedly have a negative effect on the sentiments of investors in South Africa.
While the world economy remains an important influencing factor on our economy, especially the position of our major export partners, South Africa’s soaring deficit on its trade balance, focuses afresh on the state of our economy. The important question is what does the ANC led government do to create a favourable climate for the South African economy to perform optimally?
The United Democratic Movement believes that the ANC government should stop window dressing and should stop addressing only the symptoms of our economic problems and start to address the key problems in our economy.
Under the ANC government, South Africa is experiencing a decline in incomes per capita (destroying wealth), stagnating exports, declines in factory production, surges in capital outflows, declines of fixed investments in new projects, plummeting car sales and job losses on a major scale. Under ANC rule, South Africa is getting poorer by the day, as fast as under apartheid.
Facts on the table paints a picture of economic failure. It can be accepted that this situation will worsen if the ANC succeeds in obtaining a two-third majority in the 1999 election.
The UDM believes that economic growth and job creation must be; boosted through an aggressive policy of enterprise development, giving entrepreneurs in underprivileged communities access to capital.
SA’s economic fundamentals should now be addressed, given the latest worse than expected trade balance figures