What We Know About SA’s “Stimulus Package” to Kickstart Sluggish Growth
President Cyril Ramaphosa on Friday said the government would establish an infrastructure fund, a municipal infrastructure improvement package and do away with some regulatory restrictions, including in tourism, as part of an economic stimulus plan to reignite growth.
Ramaphosa said the R50 billion stimulus package, which will be implemented immediately, would consist of five broad parts, mainly the implementation of growth enhancing economic reforms, reprioritisation of public spending to support job creation, the establishment of an infrastructure fund, addressing urgent and pressing matters in education and health and investing in municipal social infrastructure improvement.
Women, youth and SMEs a priority
The stimulus package kickstarts a range of measures to revive an economy that has struggled to grow significantly over the past decade, and fell into a technical recession with a second consecutive contraction in the second quarter of this year. The measures will include a jobs summit and an international investment conference next month.
“We are decisively accelerating the implementation of key economic reforms. We have taken decisive steps to rebuild investor confidence, end corruption and state capture, restore good governance at state owned enterprises and strengthen critical public institutions,” Ramaphosa told a news conference.
“The measures we are announcing give priority to those areas of economic activity that will have the greatest impact on youth, women and small businesses.”
He said the government would re-direct resources towards priority areas including health and education.
“To address some of the shortages in our hospitals, funding is being made available immediately to buy beds and linen, while the Minister of Health and the National Health Council will immediately fill 2,200 critical medical posts, including nurses and interns,” Ramaphosa said.
“Additional funds will be directed to addressing the dire state of sanitation facilities in many public schools, ensuring the completion of 1,100 sanitation projects in the current financial year.”
Ramaphosa said the plan would altogether result in reprioritised expenditure and new project level funding of around R50 billion.
” The minister of finance will provide more detail about the final amounts involved and the specific areas affected during the Medium-Term Budget Policy Statement [next month],” he said.
Ramaphosa said the government would also review its visa regime to boost tourism revenue.
“Within the next few months, amendments will be made to regulations on the travel of minors, the list of countries requiring visas to enter South Africa will be reviewed, an e-visas pilot will be implemented, and the visa requirements for highly skilled foreigners will be revised,” he said.
“These measures have the potential to boost tourism and make business travel a lot more conducive. Tourism continues to be a great job creator and through these measures we are confident that many more tourists will visit South Africa.”
Ramaphosa said the government had also begun a review of various administered prices, starting with electricity, port and rail tariffs in a bid to reduce the cost of doing business, boost exports and make South African industries more competitive.
“Within the next few weeks, government will initiate the process for the allocation of high-demand radio spectrum to enable licensing,” he said.
“This will unlock significant value in the telecommunications sector, increase competition, promote investment and reduce data costs. Lower data costs will also provide relief for poor households and increase the overall competitiveness of the South African economy.” (via African News Agency)