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Current account deficit worsens

moneyThe latest widening of the current account deficit to 6.8% of GDP shows that government is failing in its management of South Africa’s economy, undermining our competitiveness.

According to the South African Reserve Bank’s latest quarterly bulletin, our current account widened to 6.8% in the third quarter of 2013, despite the recent inclusion of trade revenues from Botswana, Lesotho, Namibia and Swaziland.

Out of the more than 50 countries measured weekly by The Economist, South Africa has the third worst current account deficit.

This deficit reflects a lack of competitiveness across the South African economy that arises from the high cost of doing business, red tape and a failure on the part of government to boost trade with the rest of Africa.

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The DA calls on the Finance Minister, Pravin Gordhan, to announce reforms to help turn around the widening current account deficit:

•Increase actual spending on infrastructure to 10% of GDP, as required by the National Development Plan;
•Work to reduce increases in administered prices like electricity, communication and fuel costs which raise the cost of doing business;
•Increase budget allocations to the competition authorities and the National Consumer Commission and cut red tape to make it easier for new entrants to start and grow new businesses.

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