ABSIP BELIEVES REVIVING TOURISM AND MANUFACTURING WILL HELP REGAIN LOSSES SEEN IN GDP FIGURES

ABSIP BELIEVES REVIVING TOURISM AND MANUFACTURING WILL HELP REGAIN LOSSES SEEN IN GDP FIGURES

9 Sept 2020 – The Association for Black Securities and Investment Professionals (ABSIP) said on Wednesday that enabling Small and Medium Enterprises and reviving sectors such as tourism and manufacturing will play a significant role in regaining the losses seen in the latest Gross Domestic Product (GDP) statistics.

“ABSIP has noted with great concern the 16% contraction of the economy in the latest GDP Statistics released by Statistics SA. The contraction was expected as this quarter coincided with the hard economic lockdown. As economic output and employment indicators are intimately linked we anticipate that the quarterly labour force survey – also to be released by Stats SA, will show a similarly bleak picture and we can expect a surge in the unemployment figures,” said ABSIP President, Polo Leteka Radebe.

Leteka-Radebe said this was an indication that the pandemic has not only resulted in the loss of human life, but has also had a dire impact on the economy due to more South Africans being excluded from the economic value chain.

“We are also expecting that the state of the economy and related socio-economic indicators will worsen unless drastic measures are taken to lessen the impact,” said Leteka-Radebe.

To assist the state in lessening the impact of the economic downturn, ABSIP will engage the government on mapping the way forward. We will also work with stakeholders to interrogate whether the current Covid-19 relief measures have been effective and are reaching the right beneficiaries. We also encourage our members across different sectors to contribute to government’s economic relief plans.

Three months ago, when ABSIP realised that the R200-billion loan guarantee scheme set aside for Small and Medium Enterprises was not being fully utilised to achieve its objective due to a number of factors, ABSIP engaged National Treasury to amend the terms and conditions of the scheme.

“ABSIP is satisfied with the changes made to the requirements set for SMME’s to meet in order to access the relief funds, albeit there is still room for improvement. Whilst we hope that the loan guarantee scheme take-up will accelerate the aid for SMME’s to remain viable during this period, it is clear that a much broader range of interventions and complementary initiatives are needed to arrest the current economic decline,” said Leteka-Radebe.

As a lead custodian of black professionals’ interests and black business in the financial services sector, ABSIP believes that any economic relief to be proposed by government going forward should be more ambitious, inclusive, and strategic.

“It is our proposal that government should explore which sectors can bring about growth in the economy within the shortest time-frame and help them rebound from the impact of the pandemic.”

“We are also mindful that whilst some restrictions have been lifted, South Africa is still managing a health crisis that may have abated in recent weeks but still remains an on-going challenge. In ensuring that the economy recovers, we also need to balance the preservation of human life and livelihoods. ABSIP will engage government on ways to revive businesses without compromising the already over-burdened healthcare system,” said Leteka Radebe.

“We strongly believe that enabling SMME’s and reviving sectors such as tourism and manufacturing will play a significant role in regaining the losses seen in previous months due to the lockdown,” she said.

Read more on loan guarantee scheme: http://absip.co.za/site/absip-newsletter-june-2020/

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