JOHANNESBURG, Aug 6 (Reuters) – South Africa’s new finance minister, Enoch Godongwana, said on Friday the country’s low growth and high unemployment present a major challenge showing the need for structural reforms.
President Cyril Ramaphosa on Thursday appointed Godongwana as finance minister in a Cabinet reshuffle, replacing Tito Mboweni who had asked to step down.
Godongwana was sworn in on Friday.
In an interview with eNCA television after the ceremony, Godongwana said even though he was yet to get a briefing on the extent and nature of the challenges, everyone knew the economy was not performing well.
“As a result we have got higher unemployment, and that becomes in my view a critical challenge, how we are going to grow this economy,” he said.
“And that also talks to what kind of structural reform we need to make to make sure that this economy grows, that is an important factor.”
Africa’s most industrialised economy has long suffered from extremely high unemployment, trapping millions in poverty and contributing to stark inequalities that persist nearly three decades after the end of apartheid in 1994.
The COVID-19 pandemic has exacerbated South Africa’s woes, with unemployment hitting a record 32.6% in the first quarter of this year. The economy was in recession before its first coronavirus infection in March last year.
“We need to make sure that we improve the capacity of the state to deliver on basic services,” added Godongwana, who is also chairman of the ruling African National Congress’ economic transformation subcommittee. (Reporting by Olivia Kumwenda-Mtambo; Editing by Andrew Cawthorne)