Ramaphosa unveils plan to rebound economy

South African President Cyril Ramaphosa
has unveiled a robust plan to pep-up the nation’s economy which is
currently on technical recession.

 

He unveiled the plan in his speech at an interaction with Bloomberg.

 

Ramaphosa talked on the country’s
commitment to fast track job creation infrastructure, economic reforms,
investment on social infrastructure, creation of infrastructure fund.

 

He also said the country was giving an impetus to the growth of education and the 
health and re-awakening of gas and oil and mining sectors.

 

Here is his full speech:

 

 

 

Our host, Mr Michael Bloomberg,

 

Bloomberg Television editor, Mr Erik Schatzker,

 

Esteemed Guests,

 

Ladies and Gentleman,

 

Good Morning, 

 

I wish to express my sincere gratitude to
Michael Bloomberg for hosting this discussion with such an important
group of people, and to appreciate his great interest in South Africa’s
development as a valued investment destination.

 

As the country emerges from nearly a
decade of low growth, declining investment and faltering employment, we
are determined to forge a new growth path.

 

Earlier this year, I announced an
ambitious investment drive that aims to generate at least $100 billion
in new investment over the next five years.

 

As part of this drive, we will be hosting
an Investment Conference in Johannesburg on 26 October, which will
bring together investors from within South Africa and internationally. 

 

We have appointed four Presidential
Investment Envoys, who have been travelling to major financial centres
around the world, to promote investment in South Africa ahead of the
conference.

 

We are also working to improve the
investment environment by, among other things, ensuring policy certainty
and consistency, improving the performance of state owned enterprises
and consolidating fiscal debt. 

 

As we put in place the pillars of
sustained growth into the future, we are also working to address
immediate concerns, specifically the effects of two quarters of negative
growth.

 

Technical recession

 

In response to recent news that South
Africa is in a technical recession, government last week announced an
economic stimulus and recovery plan that aims to restore growth, save
existing jobs and create new ones.

 

The stimulus and recovery plan has five broad parts:

 

Firstly, implementation of growth enhancing economic reforms.

 

Secondly, reprioritisation of public spending to support job creation.

 

Thirdly, the establishment of an Infrastructure Fund.

 

Fourthly, addressing urgent and pressing matters in education and health.

 

Fifthly, investing in municipal social infrastructure improvement.

 

We are taking immediate steps to finalise
reforms in key sectors like mining, oil and gas, tourism and
telecommunications – all of which are sectors that have great potential
for growth, but which have been constrained by policy
uncertainty.

 

We are reprioritising our budget – within
the existing fiscal framework – to invest more in those activities that
are most likely to boost growth, including agriculture, township and
rural businesses, and infrastructure.

 

Infrastructure fund

 

We see infrastructure investment as a
critical enabler of growth and job creation, and are therefore
consolidating government infrastructure resources into a single
Infrastructure Fund.

 

We intend to use that Fund to leverage
investments from development finance institutions, multilateral
development banks, asset managers and commercial banks.

 

A dedicated team located in the
Presidency will oversee the implementation of an extensive
infrastructure programme covering areas like water, transport, energy,
telecommunications and social infrastructure.

 

Resources are being made available to
provide basic needs and hire essential personnel in the public health
and education systems.

 

Despite the challenges of the present,
the South African economy has several fundamental strengths that makes
it a suitable destination for investment.

 

South Africa has established a
diversified manufacturing base that has shown its resilience and
potential to compete in the global economy. 

 

    READ: Stimulus recap: What Ramaphosa announced on Friday

 

Companies like Ford, Microsoft, GE and IBM, among others, have established operations in South Africa. 

 

Multinationals with a presence in South
Africa cite numerous advantages, from excellent financial systems to
world-class infrastructure.

 

South Africa is a regional manufacturing
and services hub on the African continent, and, for many companies,
serves as a base to export products globally. 

 

Recent investments by companies such as
Ab Inbev, Caterpillar and Marriot Hotels are testament to the diversity
of opportunities. 

 

We have done much work in recent years to
improve investment incentives, establishing, for example, several
special economic zones across the country, each having unique offerings
for investors. 

 

These include ready infrastructure for
business development, reduced costs for key inputs such as land, water
and electricity, and reduced corporate tax rates.

 

We are determined that our economic policy must facilitate inclusive growth.

 

The economic mainstream

 

Given our country’s history of
dispossession, and the continued economic exclusion of millions of our
people, we have a responsibility to bring all our people into the
economic mainstream.

 

We are therefore building a robust and
effective education and skills development system that equips our youth
for the workplace of the present and the workplace of tomorrow.

 

We have implemented policies to promote
black economic empowerment, to provide black people, women and people
with disability with the assets and opportunities they need to
participate more meaningfully in economic activity.

 

One of the key instruments for black
economic empowerment are Codes of Good Practice, which assess companies
in terms of levels of black ownership and the promotion of previously
disadvantaged groups through enterprise, supplier
and skills development.

 

This is sometimes seen as a barrier by
multinationals that have global practices preventing them from complying
with the black ownership element of the codes.

 

In such instances, the codes provide for
an Equity Equivalent Investment Programme, which enables international
companies to contribute to transformation through enterprise and
supplier development, critical skills development
and research and development.

 

Currently some of the approved
multinational companies that successfully participate in this programme
are Caterpillar, IBM, Dell, Microsoft and Hewlett Packard.

 

Another area that is critical to economic
transformation is land reform, which is currently a focus of intense
debate across South African society.

 

Land reform

 

There is general agreement among most
South Africans that we need to accelerate land reform not only to
redress a historical injustice, but also to effectively unlock the
economic potential of the country’s land.

 

We are committed, as government to pursue
a comprehensive approach to land and agrarian reform that ensures
transformation, development and stability, while providing certainty to
those who own land, to those who need land and
to those who are considering investing in the economy.

 

South Africa’s strategic position at the
tip of Africa, makes it a key investment location, both for
opportunities that lie within its borders and as a gateway to the rest
of the region.

 

Earlier this year, African heads of state
agreed to the establishment of an African Continental Free Trade Area
that will provide access to a market of more than 1.2 billion people and
a combined GDP of more than US$3.4 trillion.

 

This will fundamentally transform the
economies of many African countries and will further enhance the
attractiveness of South Africa – with its diverse manufacturing base,
advanced infrastructure and sophisticated financial sector
– as a compelling investment destination.

 

It is for all these reasons that we
invite you to invest in South Africa – or invest more in South Africa –
and we look forward to hosting you at our Investment Conference in
Johannesburg on 26 October.

 

I thank you.