President Cyril Ramaphosa set himself a mammoth task during the announcement of his South African Economic Reconstruction and Recovery Plan, during a joint sitting of the National Assembly and the National Council of Provinces.
Ramaphosa announced a set of extraordinary measures to restore confidence in the country’s economy. The main objectives being the job creation through aggressive infrastructure investment, as well as re-industrialisation through growing small business, while strengthening medium and large businesses.
In his speech he highlighted that “this is a plan through which all of us as South Africans should work together to build a new economy”.
His recovery plan is based on four priority interventions, namely:
- Vast infrastructure development rollouts countrywide,
2. Rapid expansion of energy generation capacity,
3. Employment stimulus, to create at least 800,000 jobs in the immediate term, and
4. Driving rapid and sustained industrial growth.
The interventions outlined in this plan will:
- achieve sufficient, secure and reliable energy supply within two years;
- create and support over 800,000 work opportunities in the immediate term to respond to job losses;
- unlock more than R1 trillion in infrastructure investment over the next 4 years;
- reduce data costs for every South African and expand broadband access to low-income households;
- reverse the decline of the local manufacturing sector and promote reindustrialisation through deeper levels of localisation and exports;
- resuscitate vulnerable sectors such as tourism, which have been hard hit by the pandemic.
The objectives of the Economic Reconstruction And Recovery Plan
- To create jobs, primarily through aggressive infrastructure investment and mass employment programmes;
- To reindustrialise our economy, focusing on growing small businesses;
- To accelerate economic reforms to unlock investment and growth;
- To fight crime and corruption; and,
- To improve the capability of the state.
The plan is expected to be implemented immediately, but recognising the dire situation of poverty which the Covid-19 pandemic has created, Ramaphosa announced that the current Covid relief grants would be extended for a further three months.
According to the modelling done by National Treasury, the implementation of this Economic Reconstruction And Recovery Plan will raise growth to around 3% on average over the next 10 years.
Reactions To President Ramaphosa’s Recovery Plan
With government’s economic recovery now tabled, political parties are hoping to scrutinise the strategy in a debate next week.
The Democratic Alliance (DA) said that the president’s speech was not the brave commitment that it had hoped for. They said they have heard a lot of these promises before and yet there has been slow progress.
Pan African Investments and Research’s Iraj Abedian said that President Ramaphosa fell short on a few issues.
ActionSA leader Herman Mashaba said that the president seemed incapable of taking the tough reforms the economy needed for fear of alienating factions within the governing party.
Our Conclusion
The road ahead of us to recover our economy is still a long one. However, if there is one thing we have come to realise is that when we unite as a country nothing is impossible. We have endured much, and have always emerged stronger and more united.
As President Ramaphosa said; “Our ability to reignite our economy rests on the decisions we take in this moment, and the urgency with which we address this crisis”.
Together we will build a new economy.