Ramaphosa's economic package to focus on infrastructure development
President Cyril Ramaphosa on Friday moved to provide strong government leadership in the recessionary environment to stimulate the economy and create jobs.
The president announced a package of measures to act as a catalyst and draw resources from the public and private sector to revitalise the lagging economy.
Ramaphosa announced a wide range of interventions focusing on agriculture‚ tourism‚ manufacturing‚ communications and township economies - with immediate implementation and oversight from a new execution team in the presidency.
The plan will result in reprioritised expenditure and new project level funding of around R50bn‚ Ramaphosa said.
Minister of Finance Nhlanhla Nene will outline the final amounts involved and the specific areas to be reprioritised during the Medium Term Budget Policy Statement next month.
Ramaphosa said his plan prioritised infrastructure spending as a “critical driver of economic activity”.
“With a view to unlocking the potential to create more jobs on a large scale‚ we have decided to set up a South Africa Infrastructure Fund‚ which will fundamentally transform our approach to the rollout‚ building and implementation of infrastructure projects.
“The lessons we learnt in the 2010 World Cup infrastructure rollout will stand us in good stead as we set out this fund‚” Ramaphosa said.
He said the private sector was “hugely excited” to partner with government on a “mega fund”. Government’s contribution to the Infrastructure Fund over three years would be in excess of R400bn. This will be use to leverage additional resources from developmental finance institutions‚ multilateral development banks‚ and private lenders and investors.
“In support of the stimulus efforts‚ the Industrial Development Corporate will be targeting to increase its approvals to R20bn over 12 months‚ an increase of 20% on the previous year‚” he said.Ramaphosa announced that he was establishing a dedicated Infrastructure Execution Team in the Presidency to oversee implementation.
“The team will identify and quantify ‘shovel-ready’ public sector projects‚ such as roads and dams‚ and engage the private sector to manage delivery‚” he said.
Ramaphosa said the stimulus and recovery plan consisted of a range of measures to ignite economic activity‚ restore investor confidence‚ prevent further job losses and create new jobs‚ and to address some urgent challenges that affect the conditions faced by vulnerable groups among our people.
Elements of the package include:• Amendments to the visa architecture to relax burdensome requirements for travel for minors and foreign tourists;• The approval of the revised Mining Charter to revitalise the mining industry and provide certainty to investors;• The Mineral and Petroleum Resources Development Act Amendment Bill‚ which has contributed to a lot of uncertainty in the sector‚ is to be redrafted with separate legislation for the regulation of the oil and gas industry;• Government is reviewing various administered prices‚ starting with electricity‚ port and rail tariffs to reduce the cost of doing business‚ to boost exports and to make South African industry more competitive;• Government will initiate the process for the allocation of high-demand radio spectrum to enable licensing to unlock significant value in the telecommunications sector‚ increase competition‚ promote investment and reduce data costs;• Procurement from small business and cooperatives are to be expanded. There will be a vigorous crackdown on illegal imports;• Re-prioritised funding will be directed towards investments in agriculture and economic activity in townships and rural areas;• The revitalisation of three regional and 26 township industrial parks as catalysts for broader economic and industrial development in townships and rural areas;• A township and rural entrepreneurship fund is being established to provide finance to either scale up existing projects or provide start-up capital for new projects;• Additional funds will be directed to addressing the dire state of sanitation facilities in many public schools‚ ensuring the completion of 1‚100 sanitation projects in the current financial year;• 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; and• A total of 57 priority pilot municipalities across the nine provinces have been identified to unlock infrastructure spending in the short term.
Ramaphosa said government wanted to go to the upcoming jobs summit “armed with interventions rather than to theorise and talk about probabilities”.
Similarly by the time the much-anticipated investor conference is held at the end of October‚ there should be a “good measure of certainty” on issues of concern‚ such as the mining charter and telecoms spectrum.
He said the measure of success of the package would be the growth generated and the number of jobs created. He said government would constantly be evaluating its progress on implementation.