South African President Cyril Ramaphosa
has unveiled plans to kick-start the country’s ailing economy and
announced a reprioritisation of R50 billion to reignite economic growth
and create jobs.
has unveiled plans to kick-start the country’s ailing economy and
announced a reprioritisation of R50 billion to reignite economic growth
and create jobs.
Presenting the government’s
much-anticipated grand plan Ramaphosa also announced the establishment
of an infrastructure fund that is a core part of the package.
much-anticipated grand plan Ramaphosa also announced the establishment
of an infrastructure fund that is a core part of the package.
He said R400 billion will be leveraged
from various development finance institutions, pension funds and
ordinary investors, among others over the medium term to drive the
infrastructure fund.
from various development finance institutions, pension funds and
ordinary investors, among others over the medium term to drive the
infrastructure fund.
“We are establishing a dedicated
infrastructure team in the presidency that has project management and
engineering skills which will identify shovel-ready public sector
projects such as roads and dams,” Ramaphosa said during a
briefing at the Union Buildings.
infrastructure team in the presidency that has project management and
engineering skills which will identify shovel-ready public sector
projects such as roads and dams,” Ramaphosa said during a
briefing at the Union Buildings.
“We have limited fiscal space to increase
spending or increase borrowing … we do not have have fiscal space to
pour money in the economy … we have to resort to re-prioritising our
spending and budget within the current fiscal
frame work,” the president said.
spending or increase borrowing … we do not have have fiscal space to
pour money in the economy … we have to resort to re-prioritising our
spending and budget within the current fiscal
frame work,” the president said.
“We have limited fiscal space to increase
spending or increase borrowing. We do not have have fiscal space to
pour money in the economy. We have to resort to re-prioritising our
spending and budget within the current fiscal frame
work”
spending or increase borrowing. We do not have have fiscal space to
pour money in the economy. We have to resort to re-prioritising our
spending and budget within the current fiscal frame
work”
The package also includes the new Mining
Charter, major changes to visa requirements to boost the tourism sector,
the development of industrial parks and township businesses, and
reforms in the telecommunications industry, particularly
the release of spectrum to create competition and drive down the cost
of data.
Charter, major changes to visa requirements to boost the tourism sector,
the development of industrial parks and township businesses, and
reforms in the telecommunications industry, particularly
the release of spectrum to create competition and drive down the cost
of data.
“The stimulus package consists of a range
of measures, financial and non-financial, to ignite economic activity
and restore investor confidence, and prevent further job losses, and
create new jobs,” Ramaphosa said.
of measures, financial and non-financial, to ignite economic activity
and restore investor confidence, and prevent further job losses, and
create new jobs,” Ramaphosa said.
The measures give priority to those sectors that can revive the economy, including agriculture.
Ramaphosa said more details on how the
budget will be reprioritised will be provided when finance minister
Nhlanhla Nene presents the medium-term budget policy statement. Nene
said most of the funds for the stimulus package would
be moved from under-performing departments.
budget will be reprioritised will be provided when finance minister
Nhlanhla Nene presents the medium-term budget policy statement. Nene
said most of the funds for the stimulus package would
be moved from under-performing departments.
Ramaphosa first proposed the stimulus
package in July, in a bid to boost SA’s sluggish economy and tackle the
unemployment crisis, which at just more than 27% remains a major
headache for the government more than two decades since
the official fall of apartheid. However, Ramaphosa’s plan to reignite
growth was dealt a heavy blow with shock second-quarter GDP data
indicating that SA had entered a technical recession.
package in July, in a bid to boost SA’s sluggish economy and tackle the
unemployment crisis, which at just more than 27% remains a major
headache for the government more than two decades since
the official fall of apartheid. However, Ramaphosa’s plan to reignite
growth was dealt a heavy blow with shock second-quarter GDP data
indicating that SA had entered a technical recession.
The rand extended gains and government
borrowing costs fell following the speech. The rand was at R14.22
against the dollar, its best level in about four weeks, while the yield
on the benchmark R186 bond was at 9.03% from 9.08%.
borrowing costs fell following the speech. The rand was at R14.22
against the dollar, its best level in about four weeks, while the yield
on the benchmark R186 bond was at 9.03% from 9.08%.
