During a press briefing on Friday, September 21, President Cyril Ramaphosa communicated his government’s plan to revive the country’s economy. This is coming after data released earlier this month by Statistics South Africa judged the country to have dipped into a recession.
In his speech, he outlined the stimulus and recovery plan consisting of a range of measures, both financial and non-financial, that give priority to areas of economic activity that will have the greatest impact on youth, women and small businesses. The measures will be implemented immediately to ignite economic activity, restore investor confidence, prevent job losses and create new jobs. Some urgent challenges that affect the conditions faced by vulnerable groups among the people will also be addressed by these measures.
The plan is categorized into parts as follows:
- The implementation of growth-enhancing economic reforms;
- The prioritisation of public spending to support job creation;
- The establishment of an infrastructure fund;
- Addressing urgent and pressing matters in education and health; and
- Investing in municipal social infrastructure improvement.
Regarding reforms, changes that have been approved by the Cabinet to the country’s visa regime will become effective. Within the next few months, amendments will be made to regulations on the travel of minors, the list of countries requiring visas to enter the country will be reviewed to boost tourism. An e-visa pilot will be implemented, and the visa requirements for highly skilled foreigners will be revised to make business travel a lot more accommodating.
In highlighting the importance of the country’s mining sector, he said the government has approved the revised Mining Charter in a bid to revitalise the mining industry and provide certainty to investors while charting a sustainable path towards a transformed and inclusive industry. “It is imperative that South Africa restores investment and exploration levels in the mining sector as mining and mineral beneficiation activities have significant potential to drive long-term growth, exports and job growth,” he said.
He further stated that the Parliament will be requested in terms of its rules not to proceed with the Mineral and Petroleum Resources Development Act Amendment Bill which has contributed to a lot of uncertainty in the sector, and a separate legislation for the regulation of the oil and gas industry will be drafted.
Re-prioritised funding will be directed towards investments in agriculture. Agriculture production experienced a 29.2 percent decline in the second quarter of 2018 coming on the heels of a 33.6 percent drop in the first quarter. Statistics South Africa is convinced that the insufficient production of field crops and horticultural products are responsible for this slump hence a significant portion of the funding will go towards export-oriented crops that are highly labour intensive.
The stimulus and recovery plan prioritises infrastructure spending as a critical driver of economic activity as infrastructure expansion and maintenance has the potential to create jobs on a large scale, attract investment and lay a foundation for sustainable economic expansion.
With a view to unlocking the potential to create more jobs on a large scale, the government has decided to set up the South Africa Infrastructure Fund, which will fundamentally transform the approach to the roll-out building and implementation of infrastructure projects. R400 billion infrastructure fund has been set aside to be used to leverage additional resources from development finance institutions, multilateral development banks, private lenders and investors.
To ensure effective and judicious use of the funds, a dedicated Infrastructure Execution Team has been established in the Presidency. With extensive project management and engineering expertise, the team will identify and quantify ‘shovel ready’ public sector projects such as roads and dams to assist with project design, oversee implementation and engage the private sector to manage delivery.
Furthermore, the government will redirect resources towards addressing immediate challenges in health and education. Additional funds will be made available for revamping the dilapidated state of sanitation facilities in many public schools, ensuring the completion of 1,100 sanitation projects in the current financial year.
“To address some of the shortages in our hospitals, funding is being made available immediately to buy beds and linen, while the Minister of Health and the National Health Council will immediately fill 2,200 critical medical posts, including nurses and interns,” he added.
In conclusion, he called on well-meaning South Africans to collaborate with his administration to restore the economy to growth in the immediate term and prepare the ground for sustainable, inclusive growth into the future.