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In command, and in control

President unveils plan that not only tackles the economic fallout of Covid-19 but also addresses the state’s broader economic goals.
Bold speech. President Cyril Ramaphosa is, among other things, addressing government's inability to turn plans into action. Image: GCIS

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.

Watch the livestream and read the full speech here

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.

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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.”

Going boldly

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.

Five-goal plan

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.

SAA?

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.”

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ANC, in command(o), in denial and out of control.

“He wants the energy crisis to be sorted out within two years”, isn’t there an election in the next two years?

The closing statement was the most inappropriate joke of the article, “a new economy based on fairness, justice and equality”. When I think of affirmative action, I think “fairness, justice and equality”. Yeah right.

Yes it really is cringe-inducing stuff, this sycophantic article. The so-called plan is diametrically the opposite of what is needed; it for example calls for hundreds of thousands of more civil alleged servants, when the real need is for slashing the public service payroll.

SAA?
Basic Income Grant?

He does seem to have a scheme going to undercut the Zupta by arresting the lieutenants so they will go canary on the generals

People are different. They differ in backgrounds, schooling, mental capacity, cognitive ability, risk tolerance, work ethics, mindset and worldview. These differences will manifest as inequality in their material position. The only way to have material equality is by treating people differently. Therefore, we can have material equality or be equal before the law, but we cannot have both at the same time. We can have social justice or legal justice, but not both at the same time. We can be fair and have equal outcomes, or we can be fair and have equal opportunities, but we cannot have both at the same time. In short, we can have an economy, or we can have social justice, fairness and equality, but we cannot have them all at the same time.

A leader, who promises to deliver all these factors at the same time, is either mentally handicapped, disingenuous, or acting in his own self-interest. He could of course also be a socialist, for that is merely the term that includes the first three concepts.

Wonderful humour in the headline. I laughed out loud.

Hardly anything about the plan turned out to be exiting; the average 3% GDP growth for the next decade can be believed if it happens (economists are sceptical) and how on earth the president can instruct private companies to show in their annual reports the extent of local content used in manufacturing – does the government now dictate content for annual reports?
What was encouraging was that problems with the construction mafia will at last now be addressed – this after the huge losses construction companies had to suffer over several years.
And much of the jobs are temporary – no indepth reconstruction of the economy. Some projects were apparently announced in earlier plans of 2018 and no one knows how much of the investment pledges are pie in the sky and how much is real.

This government never ceases to amaze me:

On the one hand, you’ll read that SARS may have a R800bn revenue shortfall….

….and then you have moments like today, where the president pulls huge figures “out of his hat” running into the billions, that is aimed at this or that.

Where does he get this money from govt is planning to spend? (…the state once again, is awash with excess funds, it seems)

It seems the ANC government and its acolytes are most adroit at postulating plans. Why since Mbeki’s time they have had plan after plan but regrettably they are atrocious at deliverables or even achieving any form of milestones. One only has to look at Eskom over the years to see where this current fresh and new planning is going to get us. I sincerely hope that the president has the 00 to tell the country on a regular basis what has been achieved on time against the master plan – and please no changing of the end date of the plan because circumstances were not conducive. My biggest concern is with the potential employment of these in excess of 800,000 person and how they will be motivated to work as generally the labour force in this country tend to be bone idle and have a gimme attitude to life. For all our taxpayers sakes, lets hope this is a success

Fantastic plan and very exciting times await South Africa. This is in addition to the Africa free trade agreement. We are a truly blessed nation!

Hopefully your comment was meant ironically? Please tell me you’re joking or sarcastic?

Dadape is a troll, Incitatus. Best to ignore him and hopefully he will go away and let the grownups talk.

Exactly, it’s either that or there is a missing “e” in his title, I’ll leave it up to you as to where it should be placed!!:):)

Dadape ,
What drug are you on ? Please tell ! I also want to be happy …

He is going to spend billions on the R350.00 per month grant.

Why not give these very people to “opportunity” to do a days work once a week for the R350.00. It will give them “dignity”. Handouts does the opposite.

They can just clean the areas where they live? Municipalities can then trim their bloated workforce even more saving more money to spend on these “working” grants.

Or is it just easier to buy votes with free stuff and ensure people are dependent on the state. So what this lot is doing is getting the tax payer to pay for buying them votes.

#VoetsekANC

I wonder if the treasury chaps agreed with the contents of the Speech by the frog boiler. Does he realise that once Covid 19 is under control that the rich and skilled will flee with their revenues from taxes, consumption and job creation. Unemployment will get worse-infrastructure spend or not.

It is very clear who is winning this global war-its the countries with highly skilled, highly educated people e.g. Singapore, Taiwan, Israel, Switzerland etc. If our education-and its outcomes -doesn’t improve dramatically we are finished.

As for our Jamnadas-where is he these days with his huge fleet of SAA aircraft dominating global travel.

I now await the next version of the “Economic Reconstruction And Recovery Plan”, plan number 69.

Ramaphosa in Control? Thank you Mr Claasen for a good laugh.

End of comments.

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