The president has announced a plan to kick-start the economy. Here are the main points he made
President Cyril Ramaphosa has announced measures to kickstart the economy after it unexpectedly entered a recession in the second quarter of 2018.
Introducing the Economic Stimulus and Recovery Plan, he said: “It is evident from the contraction of the economy indicated in the first two quarters that our economic challenges are huge.”
The measures are aimed at igniting economic activity, restoring investor confidence and stopping job losses, he said.
Here are the main points he made:
1. Immediate changes to visas
Ramaphosa announced “immediate changes to visa architecture”, including removing obstacles to the travel of minors and reducing the number of countries that require visas to enter the country. The new approach would allow highly skilled foreigners to enter the country more easily.
“We are confident that many more tourists will enter SA.”
2. Revised mining charter
Ramaphosa announced that “following extensive consultation”, cabinet had approved a revised mining charter that would “provide certainty to investors”.
He added that parliament would be asked to scrap the controversial Minerals and Petroleum Resources Development Act to remove obstacles to investment.
3. Review of the cost of doing business
Ramaphosa said measures were being taken “to reduce the cost of doing business”. He said the government would review administrative prices charged for electricity, as well as reduce “ports and rail tariffs”.
4. Rapid roll-out of radio spectrum
Ramaphosa said “high-demand radio spectrum to enable licencing” would be rolled out “in the next few weeks”.
He said the effect of this would be to reduce data costs and “increase the overall competitiveness of the South African economy”.
5. Reprioritisation of R50bn in spending
Ramaphosa said the government had “limited fiscal space to increase spending or borrowing” and so it would repriotise existing budgets to focus on agriculture, the township economy and rural areas.
“We are focusing our attention on agriculture,” he said. The reprioritised spending would include “support measures for black commercial farmers”.
He said he had appointed a “top class” panel to advise on land reform, which included “business-oriented” leaders as well as farmers.
He said a “township and rural entrepreneurship fund” would be created to scale up existing projects and provide capital for new projects.
Repriortised funding would also be used for hospital beds, equipment and sanitation in schools.
6. A R400bn new SA infrastructure fund
Ramaphosa said infrastructure funding “has, over the years, been tapering down”.
He said the new fund would learn lessons from the roll-out of infrastructure for the 2010 World Cup.
It would be “a mega fund that will galvanise the private sector. They are hugely excited about this.”
He said the fiscus would contribute “in excess of R400bn” which would leverage more money from banks and investors. It would have “a blended finance kind of character”.
Ramaphosa announced a dedicated infrastructure investment team with project management experience to “identify and quantify shovel-ready projects such as roads and dams”.