The global financial crisis is hurting South Africa's economy and the government needs to take steps to reduce job losses, the president said Friday in his first state-of-the-nation address.
In his speech to parliament, Kgalema Motlanthe said demand for South African exports has declined and production has dropped, causing some companies to lay off workers.
"The global economic meltdown does pose serious dangers for our economy in terms of job losses and the quality of life of our people," he said. "We have been forced to tone down our forecasts in terms of growth and job-creation."
The South African economy is only expected to grow at a rate of about 3 percent in 2009 after seeing increases of about 5 percent annually in the past three years.
Unemployment stands at more than 20 percent and some experts have estimated that 250,000 jobs are at risk. A number of mining and car companies have indicated that they will lay off staff.
Motlanthe said the government was looking at ways to minimize the impact of the crisis such as increasing its public investment projects and public sector employment programs.
He appealed to the private sector to find ways to counter the decline in investments and avoid shutting down factories.
"Alternatives to layoffs will be explored, including longer holidays, extended training, short time and job-sharing," he said.
Finance Minister Trevor Manuel is expected to elaborate on government's response to the financial crisis when he presents his budget on Wednesday.
Motlanthe, who is also chair of the regional Southern African Development Community, said he welcomed the positive steps taken by neighboring Zimbabwe to form a unity government.
"Now the work of reconstruction can start in earnest; and South Africa stands ready to assist wherever we can," he said.
Motlanthe, 59, is the third president of South Africa since the end of white rule in 1994.
A mild-mannered former freedom fighter, he was installed in September after former President Thabo Mbeki was forced to quit by the governing African National Congress in an internal power struggle.
However, Motlanthe is widely seen as a caretaker president until elections when ANC leader Jacob Zuma is expected to take over the position. Motlanthe is expected to announce a date next week for the elections, which have to take place by July.
Motlanthe has had to regroup the government after a mass walkout in solidarity with Mbeki.
In his speech Friday, Motlanthe said South Africa had weathered the political storm and that as the country heads into its fourth multiracial vote, it is "worlds apart from the divisions, conflicts and exclusion of a mere 15 years ago."
Motlanthe said there had been much change in South Africa since 1994 with millions of black people benefiting from better housing, education and health systems.
"But let us not delude ourselves: Such transformation is still at its nascent stages. We still have a long way to go," he said.
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