Business Maverick

Business Maverick

South Africa Readying Economic Reboot Plan, Ramaphosa Says

Cyril Ramaphosa, South Africa's president, speaks during a Bloomberg Television interview during the South African Investment Conference in Johannesburg on Wednesday, Nov. 6, 2019.

South African President Cyril Ramaphosa said consensus is emerging on a plan to revive an economy mired in the worst recession since 1992.

The proposals should be finalized within three weeks and the government will go into overdrive to execute them, Ramaphosa said in an online briefing to the South African National Editors Forum on Wednesday.

“We now need to move forward so we will be able to put the plan to the nation,” he said. “I want to see the implementation taking place and it will be directed from the president’s office.”

The coronavirus and a lockdown imposed in late March to curb its spread brought Africa’s most industrialized economy to a near standstill, with gross domestic product shrinking an annualized 51% in the three months through June from the previous quarter. The unemployment rate, which stood at 30% before the pandemic struck, is set to surge with a group of 30 academics and researchers estimating that 3 million people lost their jobs between February and April.

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The government has unveiled a 500 billion-rand ($30-billion) package to support those worst affected by the shutdown. Ramaphosa is also spearheading a drive to garner more than $100 billion in private investment in infrastructure over the next decade.

Even so, business leaders have complained that the government has failed to display the requisite urgency when it comes to reviving growth and reducing red tape, with a plethora of meetings and succession of plans failing to culminate in concrete action.

Recession Extended

Talks between business, labor and government leaders to reach agreement on the recovery plan are going slowly, but are making progress, a person familiar with the negotiations said on Wednesday, asking not to be identified as the discussions aren’t public. Sticking points are reducing the number of focus areas and being more specific about timing, resources and commitments, they said.

Ramaphosa said the plan needs to be finalized as soon as possible and funding is still being discussed.

“Government has to a large extent run out of money and we are going to have to cobble money together,” he said. “The private sector will play a key role, government will lay a key role and we will all need to put shoulder to wheel to make sure this recovery plan works.”

The president also said his administration is steadfast in its commitment to tackling rampant corruption, and will give law-enforcement agencies additional resources to enable them to do their jobs.

“We are painstakingly putting things right,” he said. “We have now reached a stage where the changes we all want to see will start to unfold.”

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