Ramaphosa: Post Covid-19 economic recovery needs to be "state-led"

Ramaphosa: Post Covid-19 economic recovery needs to be "state-led"

- President Cyril Ramaphosa has said that post-Covid-19 economic recovery needs to be "state-led"

- Ramaphosa said that measures would also be put in place to strengthen BEE

- Economists have predicted that the unemployment rate in the country will worsen

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Likening the current Covid-19 virus to the economic devastation of a war, President Cyril Ramaphosa said the economic recovery must be "state-led".

In a virtual sitting, Ramaphosa was reacting to a question about what form South Africa's economic recovery would take in the National Assembly.

News24 reports that economists have predicted that the economic shock of the pandemic will cause South Africa's GDP to shrink by between 5% and 10%, worsening the already dire unemployment rate in the country.

READ ALSO: Unemployed lady expresses frustration after Covid-19 grant declined

Ramaphosa said:

"I have often said we need to look at the post-Covid economic landscape as being equivalent to a post-war economic landscape. The state has to play a critical role. Even in your more conservative countries in the world are saying the state now needs to play its role. That is precisely what we are now looking at in government."

BusinessTech reported that the president said South Africa’s Black Economic Empowerment (BEE) regulations should be ‘enhanced’ as part of a push to build a more inclusive economy in the wake of the country’s Covid-19 pandemic.

Freedom Front Plus leader Pieter Groenewald asked the president why he was not scraping BEE and affirmative action in efforts to build a new economy.

Ramaphosa said if anything, these mechanisms need to be enhanced.

The main focus of the state's economic support so far has been the announcement of a R500 billion support package in April. The package is meant to include about R95 billion in new lending from international finance institutions, which has not yet been received.

Asked about languishing South African Airways, Ramaphosa said the government would be looking at the business rescue plan proposed by the airline's business rescue practitioners "very closely".

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Source: Briefly.co.za

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