Political analyst Somadoda Fikeni says government will have to do more than just unveiling plans to re-assure the public that it can turn around the country’s ailing economy. Fikeni was reacting to the economic recovery and stimulus package announced by President Cyril Ramaphosa earlier on Friday.
The plan includes re-allocating R45 billion of public funds, a review of the current visa regime, the assessment of administered prices like the electricity tariff and the establishment of a R 400 billion infrastructure fund through public private partnership.
In addition, an Infrastructure Executive Committee will be established to identify infrastructure projects that can be easily pursued.
Fikeni has lauded the plans, but says implementation remains a challenge. “Some of these are actually continuing from where government was because it has always been spending on infrastructure. So the real question will be what will be different this time around that will make things different. And secondly the issue of simplifying the investment environment has been there for some time – again the details on what will be different this time around is very important because the biggest problem that the country has been facing is leadership and institutional capacity to deliver. To some degree most of the details there are quiet familiar, the question is why have they not been implemented?
Most economists have welcomed the new measures announced by Ramaphosa. Some of them say it cannot be called a stimulus package, as this usually contains temporary tax cuts and increased public spending.
“The package announced by the President today needs to be supported, although it is not a stimulus package in a traditional sense, it will go some way to improve economic growth in SA, ” says Nedbank Economist Isaac Matshego. Authors- Amos Phago and Tshepo Mongoai
