Trillions in investments, thousands of jobs to help Africa’s 2nd biggest economy recover from COVI-19 devastation

AFRICAN MIRROR REPORTER 

SOUTH African president has unveiled a bold multi-trillion rand programme to revive an economy battered by the COVID-19.

In a special address to Parliament, Ramaphosa said to recover from COVID-19, South Africa has to unleash the full potential of its economy by, among others, implementing necessary reforms, removing regulatory barriers that increase costs and create inefficiencies in the economy, securing our energy supply, and freeing up digital infrastructure. 

He said the plan directly responds to the immediate economic impact of COVID-19 by driving job creation and expanding support for vulnerable households. This would be done through a major infrastructure programme and a large-scale employment stimulus, coupled with an intensive localisation drive and industrial expansion.

 The pillar of the plan are;

– To achieve sufficient, secure and reliable energy supply within two years. A total of 11 800 megawatts of new generation capacity will be added to the grid with an additional 2000 MW from independent power producers.

– To create and support over 800,000 work opportunities in the immediate term to respond to job losses. Among them are 300 000 opportunities for young people to serve as education and school assistants, 60 000 labour intensive jobs and  6000 community health jobs.

– To unlock more than R1 trillion in infrastructure investment over the next four years.  A total of 50 projects will be fast-tracked. These include housing projects in Gauteng, the North West, KwaZulu-Natal and the Free State. A further 200 projects are in the pipeline.

– To reduce data costs for every South African and expand broadband access to low-income households.

– To reverse the decline of the local manufacturing sector and promote reindustrialisation through deeper levels of localisation and exports.

– To resuscitate vulnerable sectors such as tourism, which have been hard hit by the pandemic.

The South African president said modelling done by the national treasury, the implementation of this plan will raise growth to around 3% on average over the next 10 years.

“Our recovery will be propelled by swift reforms to unleash the potential of the economy, and supported by an efficient state that is committed to clean governance. It will be transformative. 

It will be inclusive. It will be digital, green and sustainable, and it will invest in our human capital to lay the foundations for the future.  The economic reconstruction and recovery plan recognises that to support a rapid economic rebound, South Africa needs to focus on a few high-impact interventions and ensure they are executed swiftly and effectively,” Ramaphosa said.

He said to create jobs in the manufacturing sector, South African needs to reduce its dependence on imports. He added that South Africa currently imports around R1.1 trillion of goods, excluding oil, each year.

‘If we were to manufacture just 10% of these goods locally, it is estimated that we could add 2 percentage points to our annual GDP.  The rest of Africa currently imports R2.9 trillion worth of manufactured goods from outside the continent each year.  If South Africa were to supply just 2% of those goods, it would add 1.2 percentage points to our annual GDP.  And if we succeed in reaching our target of R1.2 trillion in new investment by 2023, it could add around 2.5% to our annual GDP,” Ramaphosa said.