KwaZulu-Natal economy will grow‚ but challenges remain: Premier

KwaZulu-Natal Premier Willies Mchunu believes the province's economic growth will outstrip the rest of the country.

Speaking at the State of the Province address on Wednesday‚ he said the province's economy was expected to grow by 1.8% in 2017 - slightly above the national average forecast of 1.6%.

But this optimism was overshadowed by the difficulties faced here and elsewhere across the nation.

Mchunu said the global economic outlook has remained subdued over the last year and the South African and KZN economies reflected the same sentiments‚ to the extent that the KZN contribution to GDP contracted by 0.16% in the 3rd quarter of 2016.

"During the same period the manufacturing sector‚ as a key labour-creating sector in the KZN economy‚ contracted by 3.1%. Matters are further compounded by the fact that the outlook for the coming financial year is not much better‚" he said.

Mchunu said sluggish economic growth has wide-ranging knock-on effects in KZN. He said one of the most severe impacts has been on the ability of the provincial economy to not only sustain and retain existing jobs in the province‚ but also to grow the job market and reduce unemployment.

"Unfortunately we have to report that the unemployment rate in KZN regressed to a high of 23.7%‚ in the 3rd quarter of 2016‚ which is slightly below the national unemployment rate of 27.1%‚" he said.

Mchunu said this situation poses a serious risk to socio-economic stability and the ability of government and business to meet growing demands from communities.

"Investment confidence is down and it is becoming increasingly difficult to market development and investment opportunities in the province‚" he said.

Mchunu said government is expected to step up its poverty relief programmes and to ensure that indigent programmes provide for a growing share of the population‚ this against a backdrop of a shrinking budget.

- TMG Digital/TimesLIVE