Ramaphosa says focus for economic recovery will be on infrastructure

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ANC President Cyril Ramaphosa says the governing party has discussed and refined the economic growth priority areas that will be the focus of the recovery plan after the coronavirus (COVID-19) pandemic, with the emphasis being on growing the economy and addressing structural inequality.

The president of the party was speaking in an online presentation following the ANC’s weekend lekgotla to discuss the economic recovery following the COVID-19 lockdown, among other things.

He says South Africa’s proposed reconstruction and recovery plan must be fully implemented if the country is to get out of the economic difficulties it currently finds itself in.

South African’s economy plunged by an annualised 51% in the second quarter during the hard lockdown.

Ramaphosa has acknowledged the massive shock that the lockdown brought to the economy and the deprivation people have suffered.

He reiterated that energy security, food security, tourism and the green economy are among the eight priority areas identified.

“We must strengthen energy security, localisation through industrialisation. We must strengthen food security through agricultural production. Public employment programmes must become a very important pillar to create jobs and gender equality and economic inclusion of women and young people must run through all the interventions that we are going to embark upon.”

National debt 

Ramaphosa has again emphasised that the governing party is committed to reducing South Africa’s growing budget deficit.

South Africa was already in recession when the COVID-19 pandemic hit and the country is expected to show an overall contraction for 2020 of between 8% and 10% mainly because of the lockdown. The lockdown allowed the state to prepare for the virus and has saved thousands of lives.

There are some concerns among global observers that South Africa could eventually default on its debt if the situation is not urgently addressed.

Ramaphosa says the ANC is committed to bringing rising national debt under control.

“It will be imperative to sustain reconstruction and recovery that South Africa brings its rising national debt under control and stabilises public finances. To stabilise public finances, the budget deficit must be reduced, borrowing costs must be managed and there must be pro-growth reforms such as large-scale of budget investment in the energy sector and a continuation of pro-investment reforms in a range of productive sectors including telecoms, mining, agriculture, manufacturing and tourism.”

Capacity to deliver services

Ramaphosa has acknowledged that government’s capacity to deliver services to South Africans needs to be strengthened.

He says the party believes that there must be a seamless integration of operations at the national and local level of government.

He says rural roads and urban centre renewal are among the infrastructure programmes the ANC believes must be prioritised as the country moves toward a higher growth path accompanied by much greater economic inclusion.

“A significant portion of the proposed infrastructure build programme should be directed towards municipalities. In addition to own revenue and fiscal transfers, DFI finance and private sector investment should also be mobilised to improve rural and urban municipal infrastructure. Rural roads and water services should be upgraded with a bias towards to use of local labour and labour intensive metals.”

ANC President Cyril Ramaphosa delivers closing address after the NEC’s lekgotla: