For the first time since taking office 973 days ago, President Cyril Ramaphosa gave an address showing that he is now firmly in control of the country.
Often criticised for not acting with authority or with speed, and paying too much deference to the concerns of his advisories in the ruling ANC, Ramaphosa’s speech on the South African Economic Reconstruction and Recovery Plan showed how much power he has in the party and in the state.
The plan is ambitious. It not only sets the base for South Africa’s recovery from the economic fallout of the Covid-19 crisis, which saw the economy shrink 16% quarter-on-quarter, it has also offered a way forward to address its broader economic goals.
He wants the energy crisis to be sorted out within two years, and to see a larger scale infrastructure programme create thousands of jobs through the construction of roads, homes and rail refurbishment.
“The Infrastructure Fund will provide R100 billion in catalytic finance over the next decade, leveraging as much as R1 trillion in new investment for strategic infrastructure projects.”
These projects are meant to create quick wins for an economy that has already shed over two million jobs this year.
“This starts now, with over 800 000 employment opportunities created in the months ahead.”
He said the state has moved quickly in setting the ball rolling.
“In total, we have gazetted 18 housing projects to the value of R130 billion, which together will produce more than 190 000 housing units. Transport projects currently under construction include the N1 Polokwane and N1 Musina with a total value of R1.3 billion.”
The boldness of this speech can be seen in how, just a few days ago speaking as ANC president, he dealt with the subject of whether politically connected people should be allowed to do business with the state. Back then he said further consultation was still needed on the matter.
Today Ramaphosa said there is no room for politicians doing business with the state.
“We will strengthen the framework to ensure that political office bearers [in] all spheres of government do not do business with the state and we welcome the agreement at Nedlac that all social partners will act decisively against corruption and fraud in their ranks.”
This move is part of a wider strategy of tackling graft in government. The state is close to implementing a new National Anti-Corruption Strategy, which is meant to “improve transparency, monitoring and accountability in government and across society”.
Ramaphosa said the goal of this strategy is to “ensure that every rand of public expenditure is spent productively to benefit our people and support our recovery effort”.
The fight against corruption is not limited to ending the likes of tender fraud – it will also be looking to clamp down on the illegal economy and illicit financial flows. The latter includes transfer pricing abuse, profit shifting, value-added tax and customs duty fraud, underinvoicing of manufactured imports, and other corrupt activity and illegal schemes.
Fighting corruption is one of five goals of the recovery plan, the others being job creation, reindustrialising the economy, accelerating economic reforms and improving the capability of the state.
By focusing on improving the capability of the state, Ramaphosa further showed how much he is now in control, as he was addressing the government’s inability to turn plans into action.
This, he says, will see the government put in place new reporting structures, which will result in greater coordination and integration between national, provincial and local governments.
It will also see the creation of Operation Vulindlela, a joint initiative between the Presidency and National Treasury reporting directly to the president on a regular basis, which will fast-track the delivery of economic reforms.
This will give him more central control, as government departments have traditionally operated as separate fiefdoms under the control of their respective ministers.
Getting things done more quickly is now clearly a goal for the state under Ramaphosa.
This can be seen in him mentioning fast-tracking or derivatives thereof six times.
There was one notable absence in his speech. At no time in the hour-long address did he mention troubled state-owned airline South African Airways (SAA).
SAA needs R10.5 billion government-backed financing to start operating again, but there was seemingly no place for this in the plan.
Though SAA was not directly mentioned, Ramaphosa’s pointing out of what the state’s fiscal priorities are hints that no money could be found for it.
“In reducing government expenditure, we are ensuring that funds are reprioritised towards poverty alleviation, infrastructure investment, support for economic development and fighting crime and corruption.”
This will see it embark on a jobs programme, which will not only see it expand programmes like Working on Fire and Working for Water, but also see the maintenance and construction of municipal infrastructure and rural roads.
The jobs programme overall is expected to create 300 000 job opportunities for young people.
Privatisation on the cards
SAA might not have gotten a mention but government policy regarding state-owned enterprises (SOEs) is shifting. Ramaphosa says not only is the government looking to bring on private shareholders for some entities, but it’s also considering listing some of them.
The fixing of the country’s most important SOE, Eskom, is, for now, still a work in progress. Even so, Ramaphosa intimated that there has been progress in sorting out its debt of over R400 billion.
The power utility has been unable to provide a constant source of power, despite a drop off in demand during the Covid-19 lockdown.
To address the energy crisis, Ramaphosa announced several measures that will see around 11 800 megawatts of new generation capacity come online by 2022.
In closing, he said that though the country has gone through hardship, the plan presents an opportunity for reinvention.
“We shall not rest until we have fulfilled the potential of our country. We shall not rest until we have built a new economy based on fairness, justice and equality.”