Business and analysts have welcomed government’s plan to stimulate the country’s ailing economy. President Cyril Ramaphosa announced measures that government will be adopting to pull the South African economy out of recession.
Briefing media at the Union Buildings in Pretoria, President Ramaphosa announced that government planned to reprioritise R50 billion in spending to fund the plan. Analysts have welcomed the establishment of an infrastructure fund by government.
Ramaphosa announced that government will spend R400 billion on infrastructure development over the next three fiscal years in an effort to revive the economy. He said a team of skilled specialists will be appointed to the office of the Presidency to oversee the project.
Chief Economist at Econometrix, Dr Azar Jammine says it is a welcomed effort. “Infrastructural investment helps the economy to grow on a sustainable basis, whereas paying public servants and employing them is a short term palliative for high economic growth. So in theory this initiative is a more constructive one than the kind of government fiscal policies we have had in earlier years.”
Chief Operations Officer at Business Leadership South Africa, Busi Mavuso, says business is ready to support government in ensuring the implementation of the stimulus plan.
“There is going to be funding that’s going to come in from the private sector, so this R400 billion fund, private sector is going to come in so far as that is concerned. We have said that we are ready to deploy the necessary skills in ensuring that this works. We have said that in as far as the municipalities are concerned; you know the delivery thereof, because when you look at municipalities you will know that it is at the service delivery level where all hell breaks loose as it were and when you look at it really I think it’s a lack of skills. So business is sitting with those skills.”
President Ramaphosa announced that government plans to relax visa restrictions to help boost growth in the tourism sector. He stated that cabinet had approved the revised mining charter and said that the Mineral and Petroleum Resources Development Act will be finalised shortly.
“The mining as well as the tourism reforms are fantastic. I think they will inject some money into both sectors and create millions of jobs, including agriculture. So those ideas around that I love them and I hope they get implemented so that we can really create opportunities for rural people, for townships and for economic development,” says Wits Economist, Lumkile Mondi.
President Ramaphosa said that further details of how government plans to reprioritise funds towards the stimulus plan will be revealed in October when Finance Minister Nhlanhla Nene tables the Mid-Term Budget Policy Statement.
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