These are the 4 things government has promised to do to prop up the economy
Cabinet calls on all sectors of South Africa to rally behind state-led initiatives to boost economic growth, minister of communications Nomvula Mokonyane said on Thursday morning.
This after the South African economy contracted by 0.7% in the second quarter of 2018, the second quarter of economic decline, putting SA into a recession.
At a post-cabinet briefing, Mokonyane said rising volatility in global markets – and South Africa’s recession – require efforts to unblock constraints to economic growth while providing support to vulnerable groups.
These are the four key interventions the state plans to implement in coming months to stimulate growth.
1) Overhaul of the South African visa system.
South Africa’s much-criticised visa regulations, which were introduced in October 2014 and saw international tourists travelling to South Africa drop by 130,000, will be overhauled, Mokonyane said.
The visa requirements were relaxed in 2015, but that was not enough to reignite the tourism industry, which shed 13,000 jobs.
Tourism Minister Derek Hanekom in March said the South African government aims to grow tourism numbers by 40% by 2021.
2) Provide policy certainty.
Domestic structural constraints discouraged investment and employment creation and resulted in lacklustre economic growth the past four years, Mokonyane said.
So the government has promised to provide policy certainty by finalising key mining legislation to support the mining sector, she said.
Mineral Resources Minister Gwede Mantashe aims to finalise the country’s long-delayed mining charter by November, after extending deadlines for submissions to the end of August.
READ: SA's economy may remain depressed until the elections - but at least this industry is back from the dead
The mining sector has been concerned over stringent requirements in the charter, such as a requirement to increase black economic empowerment (BEE) ownership to 30%.
3) Host job and investment summit.
Mokonyane reiterated President Cyril Ramaphosa’s earlier commitment that the government will host a job and investment summit before the end of the year.
During his State of the Nation Address in February, Ramaphosa said he will host the summit to particularly address youth unemployment.
The summit should provide practical solutions which include ensuring economic growth, better-equipped workers and the expansion of economic infrastructure, he said.
4) A government stimulus package.
Mokonyane said details of an upcoming government stimulus package will be announced only after the job and investment summit.
But speaking in Beijing on Tuesday, Finance Minister Nhlanhla Nene said he hopes details of the stimulus package would be ready before he delivered his medium-term budget policy statement in late October.
Ramaphosa said the stimulus package will “lift the mood in the country” and spur “investment prospects and our gross domestic product growth".
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