South Africa Finance Minister Malusi Gigaba laid out an ambitious 14-point program on Thursday to wrench the economy out of recession that included the sale of non-core assets and partial privatization of state-owned firms.
The plans to stimulate “inclusive growth” in the continent’s biggest economy appear to represent an ideological shift by the African National Congress (ANC), whose political alliance with the unions has tended to make privatization a dirty word.
The continent’s most sophisticated economy entered recession for the first time since 2009 in the first quarter and is also struggling with high unemployment and credit ratings downgrades.
Gigaba said he would continue with the disposal of non-core state assets and roll out a “private sector participation framework” by March 2018.
“All of these items that we have announced… they constitute an important intervention to restore confidence and demonstrate action, and outline an action plan that we as government can be responsible for,” Gigaba said.
The government would also reduce the issuance of guarantees to state companies, especially those extended for operational purposes, he said.
Many of South Africa’s 300-odd state-owned companies, which include South African Airways, are a drain on the government’s purse. Ratings agencies have singled out some as threat to the country’s investment grade rating.