Can Cyril’s plan rescue SA?

Opposition parties question where money will come from, Cosatu says 800,000 jobs target not enough

President Cyril Ramaphosa presents the South African economic reconstruction and recovery plan yesterday
SPELLING IT OUT: President Cyril Ramaphosa presents the South African economic reconstruction and recovery plan yesterday
Image: Esa Alexander

President Cyril Ramaphosa’s plan to rebuild the SA economy, promising 800,000 jobs at a cost of R100bn over three years to get the country on a new growth path, was met with scepticism on Thursday.

While opposition parties questioned where the money would come from and criticised how the plan lacked time frames, labour federation Cosatu said the 800,000 jobs target was inadequate in a country battling an unemployment crisis.

According to Stats SA, more than two million South Africans lost their jobs between April and June 2020.

Ramaphosa said the government would spend more than R14bn in this fiscal year alone creating about 800,000 job and economic opportunities in a programme that would build on existing public works programmes and create new ones.

He outlined the plan in parliament yesterday after a seven-month-long Covid-19 lockdown that ravaged the economy, resulting in scores of businesses closing shop while pushing more than 2.2-million citizens into the ranks of unemployment nationally.

In the Eastern Cape, the continued jobs bloodbath has sharply raised unemployment to 52.8%, up from 48.9% in the first quarter, according to the Quarterly Labour Force Survey released earlier this month.

Addressing the hybrid sitting of parliament, Ramaphosa said the government had resolved to be a key driver of new employment opportunities, arguing this had proven to be more effective in stimulating job creation during crises.

“Large-scale job interventions driven by the state and social partners have proven effective in many countries that have faced devastation from wars and other crises,” he said.

“We have committed R100bn over the next three years to create jobs through public and social employment as the labour market recovers.

“This starts now, with more than 800,000 employment opportunities created in the months ahead.

“The employment stimulus is focused on those interventions that can be rolled out most quickly and have the greatest impact on economic recovery,” he said.

Of the 800,000 promised jobs, 300,000 would go to unemployed matriculants to be hired as assistants to public school teachers.

The aim was to relieve teachers of the added Covid-19 related responsibilities such as ensuring classroom hygiene and daily health screening of pupils, with the teacher’s assistant earning at least a minimum wage of R3,500 a month.

Ramaphosa also outlined that there would be massive infrastructure projects to create the desperately needed jobs.

A grinning Ramaphosa also vowed to personally ensure there would be no political interference in how the funds would be spent.

President Cyril Ramaphosa on Thursday outlined the country's much-anticipated economic recovery plan. Ramaphosa touched on various immediate and long-term projects and investments that are under way. 00:20- Infrastructure. 01:03- Expand generation capacity. 01:47- Employment stimulus. 02:13- Drive for industrial growth. #SArecoveryPlan #Ramaphosa #SAEconomy

Eastern Cape premier Oscar Mabuyane welcomed the recovery plan.

“It inspires hope that our economy will bounce back.

“We just need to ensure the agility, efficiency and effectiveness of the state in response to the plan.

“We  agree that the expansionary fiscal approach is what we need to stimulate the economy of the country.”

But economics professor Charles Wait and UDM leader Bantu Holomisa were not convinced.

Wait said he believed the 800,000 jobs figure was ambitious and would be for people who were largely unemployable anywhere else as they lacked skills.

“I took it to be low-skilled jobs and not people that are being skilled for the fourth industrial revolution,” he said.

Wait said the push to spend R100bn to help create the jobs was correct in theory.

“It is better than simply dishing out grants.”

However, he warned that the infrastructure projects would need to be closely monitored on who was employed.

“If you bring people from Sutterheim to Port Elizabeth there will be friction. They won’t be welcomed in the city. He will be obliged to employ local people.”

He doubted that Ramaphosa would be able to keep the projects away from political interference.

Holomisa described the plan as yet another promise by the state, saying even former president Thabo Mbeki had failed to eradicate the bucket system and mud schools in the Eastern Cape as he had promised.

He also questioned where the money would be coming from.

“To be honest I don’t trust these people,” he said.

“Just the other day they were telling us there is no money hence they went to the IMF to borrow money for Covid-19.

“But the way Cyril was speaking you would swear we have billions stuck somewhere.

“One would have to wait for the National Treasury to come up with time frames and where the money will be coming from because for now this is just talk, talk.”

Nelson Mandela Bay Business Chamber CEO Nomkhitha Mona said the 800,000 promised jobs would offer short-term relief, which might not necessarily translate into medium to long-term solutions for unemployment and underemployment.

“More detail is needed to understand how these short-term economic measures would be used as a springboard for sustainable economic growth.

“While no single initiative or economic sector can or should be relied upon to sustainably resolve SA’s pervasive structural unemployment, the chamber supports the call for massive infrastructure development and re-industrialisation to be the cornerstones of the country’s post-Covid-19 economic recovery plan.”

Ramaphosa also promised to address SA’s energy crisis in two years.

He said the government would be accelerating the implementation of the Integrated Resource Plan to provide a substantial increase in the contribution of renewable energy sources, battery storage and gas technology.

This should bring about 11,800MW of new generation capacity into the system by 2022.

More than half of that energy would be generated from renewable sources, he said.

“We are taking further steps to enable power generation for own use,” Ramaphosa said.

Wait said the Bay at least looked likely to benefit from Ramaphosa’s energy security promise.

“Our local situation with constant outages not linked to load-shedding would surely benefit.”

Mona said that during the medium term, energy security in SA was possible if the regulatory framework was adapted to rapidly facilitate new generation projects.

DA finance spokesperson Geordin Hill-Lewis said Ramaphosa’s speech was full of jargon, and at times turgid.

“Most importantly, President Cyril Ramaphosa did not close the credibility gap between promised reform and absent action.

“He needed to show exactly how, and when, the promised reforms would be achieved.”

Cosatu national spokesperson Sizwe Pamla agreed with Ramaphosa that the economic crisis needed all social partners to work together to rebuild the economy.

“More work is needed and in particular as to what the private sector is going to do to prevent retrenchments and to ramp up jobs.”

Mona said the ease of doing business in any country was a critical component of investment promotion.

“It would therefore be prudent for the government to foster faster economic growth by ensuring that the basics are in place, thus creating a conducive environment for businesses to thrive.

“In essence, a thriving private sector is what drives sustainable job creation.”

Turning to the tourism sector which has been devastated by the lockdown, Ramaphosa said to support the industry over this peak tourism season, the government would shortly be publishing an expanded list of countries from where resumption of international travel would be permitted, which would be supported by targeted marketing in partnership with the private sector.

He also announced that the special R350 Covid grant  had been extended. 

“We will ... be extending the special Covid-19 grant by a further three months‚”  he  said.

“This will maintain a temporary expansion of social protection and allow the labour market sufficient time to recover.”  

Ramaphosa’s economic recovery plan comes two weeks after the Bay council passed its own plan to reboot the regional economy.

Council approved a budget of R30m while the Bay CFO Selwyn Thys on Wednesday said R15m was reserved in the budget.

The city’s recovery plan wants to offer tax and rates incentives for big businesses, assist distressed firms to access debt-relief from banks and speeding up the development of catalytic projects.

Additional reporting by Bekezela Phakathi and Linda Ensor

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