Explainer: Ramaphosa's 4 key economic recovery interventions

Explainer: Ramaphosa's 4 key economic recovery interventions

- President Cyril Ramaphosa has presented his economic recovery plan amid the aftermath of the Covid-19 pandemic

- With cases, at least for now, at manageable levels, Ramaphosa's attention shifted to the financial plans to recover from shutting the nation down for the past seven months

- Briefly.co.za explores the highlights from Ramaphosa's address on the government's way forward for the economy in South Africa

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President Cyril Ramaphosa presented his economic recovery plan for South Africa to a joint sitting of both houses of Parliament on Thursday.

With the second quarter of 2020 seeing 2.2 million jobs lost and the GDP contracting by an unprecedented 16.4%, the situation is indeed at crisis levels.

Ramaphosa himself acknowledged that the pandemic had caused 'great hardship and suffering' highlighting the need for an 'inclusive and new economy'.

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Ramaphosa highlighted job creation as the key focus of his plan, which includes a 'major infrastructure programme and a large-scale employment stimulus, coupled with an intensive localisation drive and industrial expansion'.

coronavirus

Ramaphosa's economic recovery plan focused on four key interventions. Image: GovernmentZA/ Flickr
Source: UGC

Ramaphosa explained that the first leg of the plan will be a 'massive rollout of infrastructure throughout the country':

"Our infrastructure build programme will focus on social infrastructure such as schools, water, sanitation and housing for the benefit of our people. We will focus on critical network infrastructure such as ports, roads and rail that are key to our economy's competitiveness."

Ramaphosa explained that the Infrastructure Fund will be provided R100 billion in catalytic finance over the next ten years, 'leveraging as much as R1 trillion in new investment for strategic infrastructure projects'.

The President then commented that the second major leg of the plan is to expand energy generation capacity:

"We are accelerating the implementation of the Integrated Resource Plan to provide a substantial increase in the contribution of renewable energy sources, battery storage and gas technology."
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The third intervention is an employment stimulus scheme to create jobs and support livelihoods:

"Large-scale job interventions driven by the state and social partners have proven effective in many countries that have faced devastation from wars and other crises."

Ramaphosa announced that a substantial amount of funding has been allocated to drive this scheme forward, explaining that:

"We have committed R100 billion over the next three years to create jobs through public and social employment as the labour market recovers. This starts now, with over 800 000 employment opportunities created in the months ahead."

Arguably the most anticipated move was Ramaphosa's decision to extend the Special Covid-19 Grant for a further 3 months:

"This will maintain a temporary expansion of social protection and allow the labour market sufficient time to recover."

However, Ramaphosa made it clear that this grant would not be extended beyond this period, noting that discussions are underway for a basic income grant.

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The fourth and final leg of the economic plan continued Ramaphosa is a drive for industrial growth:

"This is in the context of a steady decline of our manufacturing base over many years. To place our economy on a new trajectory, we are going to support a massive growth in local production and make South African exports much more competitive."

Earlier, Briefly.co.za reported that civil society organisations had been calling for not only an increase in the availability of the social relief fund but an increase as well.

Experts pointed out that the initial plan for the Covid-19 grant had been made when lockdown was expected to only last at most a month.

Now, SA is seven months in with restrictions still in place and many feel the relief is simply not cutting it.

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Source: Briefly.co.za

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