Ramaphosa’s rescue plan – here are the new announcements
- President Cyril Ramaphosa has announced a post-Covid economic reconstruction and recovery plan on Thursday.
- Much of it was a reiteration of plans and projects already in place.
- But he confirmed plans for 800,000 new jobs, a new end-date for the R350 unemployment grant and the imminent revision of the "red list" of countries, which will allow more leisure tourists to come to South Africa.
- For more articles, go to www.BusinessInsider.co.za.
On Thursday, President Cyril Ramaphosa announced government’s Economic Reconstruction and Recovery Plan, which Treasury reckons should help to raise growth to around 3% on average over the next 10 years.
South Africa’s pandemic-hit economy is expected to shrink by at least 8% this year, with more than two million people losing their jobs in the second quarter.
“This economic shock is unprecedented in our country, and it will take an extraordinary effort to recover from it,” Ramaphosa said in parliament. “As even the darkest of clouds has a silver lining, we need to see this moment as a rupture with the past and an opportunity to drive fundamental and lasting change.”
There wasn’t that much new in his plan, however, with the major infrastructure projects he spoke about, already gazetted and some of them under way. He did make new announcements on state sector jobs that will be created in the next few months, and an end-date for the Covid unemployment grant.
Here are some of the key points in the plan
800,000 jobs to be created ‘immediately’
In the next few months, 300,000 work opportunities will be created for young people to serve as education and school assistants. Ramaphosa says this will help teachers with “basic and routine work” so that more time is spent on teaching and enabling learners to catch up from time lost because of Covid.
More than 60,000 jobs will be created for labour-intensive maintenance and construction of municipal infrastructure and rural roads. An additional 6,000 community health workers and nursing assistants will be deployed as South Africa proceeds with the implementation of National Health Insurance, Ramaphosa announced.
“Each of these work opportunities is fully funded and ready for implementation,” Ramaphosa said.
Other jobs will be created in provincial and local governments “contributing to cleaner, greener and safer public spaces and improved maintenance of facilities”.
The unemployment grant will be killed
Amid widespread calls for the Special Covid-19 Grant of R350 a month to be made permanent (and to be increased), Ramaphosa announced that it will be paid for another three months after it was supposed to end this month. More than 6 million unemployed people are currently receiving the grant. But he says that it would be impossible to extend the grant given “the stressed nature” of South Africa’s financial resources.
Still, Ramaphosa referred to discussions about the introduction of a basic income grant, which is currently being costed by government.
R1 trillion in infrastructure investment over the next four years
Ramaphosa referred to 50 new fast-tracked infrastructure projects, which were already gazetted in July. Some of these projects are already in construction, including housing projects such as Matlosana N2 in North West, Lufhereng in Gauteng, Greater Cornubia in KwaZulu-Natal and Vista Park in Free State.
There are a further more than 200 projects in the pipeline, and Ramaphosa did announced that more projects must be fast-tracked with the approval of credit enhancing instruments, provision of bulk infrastructure, and speedy processing of water use licences, environmental impact assessments and township establishment.
He also referred to the modernisation of the commuter rail network, include the Mabopane Line in Tshwane and the Central Line in Cape Town.
“We are promoting greater private sector participation in rail, including through granting third-party access to the core rail network and the revitalisation of branch lines,” Ramaphosa added.
Road rehabilitation and maintenance programmes using “labour intensive methods” are also planned.
Government is exploring the use of credit enhancing instruments to unlock bulk water infrastructure and national roads improvement projects.
SA’s power problem
While Ramaphosa gave a deadline – 2022 - for South Africa to achieve sufficient and reliable energy supply, there was not much new information about how this will be achieved, and how Eskom’s R450 billion debt burden will be solved.
He mentioned the 11,800 MW of new generation capacity which should be added to the system by 2022 as part of the Integrated Resource Plan. Agreements will be finalised with Independent Power Producers to connect over 2,000 MW of additional capacity from existing projects by June 2021.
Applications for own-use generation projects are being urgently fast-tracked, he added
Focus on 'Made in SA'
Ramaphosa emphasised a push to manufacture products locally, instead of relying on imports. He said that if South Africa could substitute 10% of its imported products with local goods, it would boost GDP by two percentage points.
"Local is not only lekker, it also helps to create jobs," he said.
Government will target specific products for manufacture by small businesses for both the domestic market and for export.
He added that there will be a big push to get South Africans to buy local amid the festive season, and he also wants companies to disclose how much they are buying locally in their annual reports.
Ramaphosa said that the government will soon publish ‘localisation targets’, that locally-made materials will be prioritised and that government will help establish supplier programmes for large businesses.
Fast-tracking mining projects
The current timeframes for mining, prospecting, water and environmental licences will be reduced by at least 50% to facilitate new investment. “The Petroleum Resources Development Bill will be finalised to unlock our country’s enormous untapped potential in upstream oil and gas reserves,” Ramaphosa said.
Red list revision imminent
Ramaphosa promised to revise the so-called red list of nationalities that can’t come to South Africa for leisure travel. Some of South Africa’s biggest tourism sources, including the UK and the US, are currently on the red list.
“To support tourism over this peak tourism season, we will shortly be publishing an expanded list of countries from where resumption of international travel will be permitted, which will be supported by targeted marketing in partnership with the private sector.”
Ramaphosa also referenced a move to implement e-visas and extending visa waivers to new tourism markets.
Clampdown on construction threats
“Criminal elements in our country have taken to the illegal occupation of construction sites and soliciting protection money from businesses,” Ramaphosa said.
To combat these practices, a Joint Rapid Response Team will respond to the problem of violent disruptions at construction sites and other business activities.
R170bn of investment pledges have materialised – so far
Ramaphosa said that South Africa received pledges of around R664 billion at two investment conferences.
“To date, just under R170 billion of capital expenditure committed during those investment conferences has been invested in projects for construction and buying equipment is essential to mining, manufacturing, telecommunications and agriculture,” he clarified.
Skilled visas coming soon
“We will shortly publish the revised list of critical skills, occupations in high demand and priority occupations to enable highly skilled individuals to be speedily recruited, and expedite the issuing of special skills visas to support local firms,” Ramaphosa said.
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