Godongwana paints gloomy GDP outlook ahead of WEF meeting

Days before he has to present a strong investment case to global leaders at the World Economic Forum (WEF), Finance Minister Enoch Godongwana has painted a bleak picture of South Africa’s growth prospects, saying the economy may have grown by a lower-than-forecast 1.6% in 2022.

In October, National Treasury forecast that GDP growth would come in at 1.9%, which had already been revised downward from 2.1% earlier last year.

Godongwana’s comments come despite South Africa’s GDP having increased by 1.6% in the third quarter of 2022.

“The forecast is not impressive as well,” Godongwana said.

But “working together, we can achieve greater” – provided some of the issues facing South Africa are dealt with, he added.

Godongwana was speaking at a WEF pre-departure business briefing in Johannesburg on Thursday morning.

He will be part of a delegation led by President Cyril Ramaphosa that will meet with world leaders in Davos from 16 to 20 January to discuss ‘Cooperation in a Fragmented World’.

Godongwana said chief among the government’s priorities is rebuilding investor confidence and mobilising investments, adding that dealing with South Africa’s worsening power crisis is critical.

“We can have the best policy on paper, [but] if we can’t provide electricity, it’s useless,” he said.

Read (in English) or listen (in Afrikaans): South Africa could experience load shedding for the next decade – CSIR

Eskom has struggled to get a handle on South Africa’s electricity supply challenges, with rolling blackouts having lasted for over 15 years. This week, it announced Stage 6 load shedding until further notice.

Minister of Human Settlements Mmamoloko Kubayi says that despite these challenges the South African delegation will endeavour to communicate to fellow WEF delegates that the country is one that is “at work and is on the road to recovery”.

Read: Cost-of-living crisis is top immediate risk for Davos elite

The delegation aims to profile the country’s recovery and implementation strategies and position it as an attractive destination for business and  investment as well as tourism.