South Africa’s growth recovery at risk from lack of policy clarity: central bank

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PRETORIA (Reuters) – South Africa’s recent economic growth turnaround is unlikely to last as 2017’s boom fades and the outlook for reform remains murky, the central bank said on Tuesday.
A miner is seen underground at Lonmin Plc’s Karee mine in Marikana, Rustenburg 100 km (62 miles) northwest of Johannesburg, file. REUTERS/Siphiwe Sibeko

The South African economy expanded by a surprising 1 percent in 2017 as agriculture recovered from a drought the year before, and the Treasury expects growth of 1.5 percent this year.

“The pickup in growth is not especially strong, however, and growth remains below long-term averages,” the Reserve Bank said in its latest Monetary Policy Review document.

“This is mainly because, at this early stage, there is little clarity around the reform agenda, and without specifics it is difficult to quantify growth responses,” the bank said.
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The bank said in the absence of “meaningful reforms”, growth was unlikely to exceed 2 percent sustainably.

South Africa is riding a wave of investor optimism since Cyril Ramaphosa replaced Jacob Zuma as leader of the ruling African National Congress party in December and as president in February.

Business confidence hit its highest since late 2015 in January on expectations that Ramaphosa would lead economic reform and fight corruption. It has since diminished slightly as industry leaders waited to see whether Ramaphosa could deliver on promises to revive growth.

Data on Tuesday showed South Africa’s factory output missed estimates in February, following five months of robust growth, pointing to a slow recovery in the economy.

Reporting by Mfuneko Toyana; Editing by Larry King

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Godwin Okafor is a financial journalist, Internet Social Entrepreneur and the Founder Naija247news Media Ltd He has over 16 experiences in journalism, which cuts across traditional and digital media. He started his journalism career in Business Day, Where he was a senior editorial graphic artist, before he left to start Naija247news, An Online Financial Newspaper in 2010. He has won series of awards and he is the chairman of Emmerich Resources Limited, the publisher of Naija247news.com and also sits on the board of Students In Business Awards, (SIBA).

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