By Lesedi Sibiya-Diplomatic Inside

The Deputy Minister of Finance Dr David Masondo, delivered a speech today at the South African financial sector competitiveness lekgotla, to discuss plans of mobilising capital and enhancing the competitiveness of South Africa’s financial markets. This comes at a time where South Africa will spare any efforts in increasing South Africa’s economic growth.

The Deputy Minister of Finance expressed that South Africa has been experiencing difficulties in economic growth in recent years which has been strained by the constant power cuts by way of load shedding/load reduction as well as further constraints in telecommunications, water and freight logistics sectors. “South Africa has been experiencing severe economic growth challenges, manifested by high level employment, fiscal imbalances, among other weaknesses in macroeconomic fundamentals.” said the Deputy Finance Minister in his opening statements. The Deputy minister has also highlighted that South Africa’s economy only grew 0.6% in 2024, with growth averaging 2% between 2021-2024 which has made cause for concern when you compare the significant economic growth of other countries. South Africa’s unemployment rate is also a contributing factor when it comes to South Africa’s lack of economic growth with our unemployment rate reaching 32.9% in the first quarter of 2025 with countries like Brazil, Turkey and India reaching 7%, 8%, 5% respectively according to Statistics South Africa. These vast differences in unemployment rates and economic growth to other countries have led the Deputy Finance Minister to emphasize the importance of collective commitment in growing South Africa’s economy. “As we tackle low growth and thus unemployment, poverty and inequality, we must also unlock the power of our financial system to serve as a platform for better economic growth and development outcomes” the Deputy Finance Minister explained in his speech.

With the financial sector being an important pillar of our economy, the Finance Minister explained that the financial sector contributed 22% of GDP in 2023 which has made it the largest sector in South Africa’s economy. The financial sector also provides employment to over 3 million South Africans and contributes 25% of corporate income tax revenues which has proven essential to funding South Africa’s national budget. “The Johannesburg Stock Exchange (JSE) is the largest and most liquid exchange in Africa, with over R20 Trillion in market capitalization and ranked among the top 20 globally by market turnover.” the Deputy Minister has highlighted.

South Africa hopes to make a significant turn around in economic growth in the next quarter to make economic stabilization more effective and plans to rely on South Africa’s financial sector to spearhead the economic growth of South Africa.