South Africa's Finance Minister Malusi Gigaba speaks during the Thomson Reuters economist of the year awards
Finance Minister Malusi Gigaba yesterday articulated his vision for the economy for the first time since his appointment in March when he unveiled governments inclusive growth plan to grow the economy.

The 14-point action plan aims to lift the economy to a higher growth path through rebuilding business confidence and to staving off the risk of a downgrade on local bonds.

Gigaba told journalists in Johannesburg that through the action plan the government was demonstrating that it was taking steps to grow the economy.

“I am confident that we can achieve higher growth as a platform to achieving a 3percent growth that can go up 6percent,” he said, adding that the plan would help address the triple challenges of poverty, unemployment and inequality.

The 14-point action plan contains targets and timelines and each intervention is assigned to a minister and focuses on a range of issues from energy to state-owned enterprises (SOEs).

It requires that Eskom approach the National Energy Regulator regarding its hardship by the end of the month.

Another target is for a case to be developed and be submitted to the Treasury and the Eskom board for the company to receive soft support until a tariff adjustment next year.

“We are expressing a deep appreciation of the weakening of Eskom’s balance sheet. There is an urgency for us to provide assistance in order for the company to fulfil their mandate,” Gigaba said.

He also said that the Minister of Energy would unveil a mechanism to support Eskom until the next tariff application, adding that the debt ceiling would not be breached.

“Whatever we do now must not breach the target debt ceiling. If we stretch the ceiling we will introduce a massive crisis for the economy,” said Gigaba.

The plan also focuses the recapitalisation and guarantees of SOEs, which includes the reduction of guarantees to SOEs and the need to continue engagements on framework for the disposal of non-core assets by March next year.

It also wants an amendment of the enabling legislation for licensing of Postbank by December, and for the Department of Telecommunications and Postal Sercives to complete the spectrum licensing process by December.

Raymond Parsons, a professor at the North West University’s School of Business and Governance said the plan recognised the headwinds facing the country and in promising action Gigaba’s plan could be seen as a step in the right direction. “The government is now beginning to engage with what needs to be done if the economy is to be turned around and SA is to break out of its ‘low growth trap’,” he said.

He also said further details would only be unpacked in the Medium Budget Policy Statement in October. It was not possible to already say that what was announced would be adequate to restore confidence.

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