Mboweni assures BRICS Bank governors that SA will implement structural reforms
JOHANNESBURG - Finance minister Tito Mboweni has given a strong indication yet that the much awaited structural reforms would form a large part of the government's economic recovery plan to be unveiled tonight.
President Cyril Ramaphosa will today finally unveil the additional economic and social relief measures that form part of the national response to the coronavirus (Covid-19) pandemic following extensive consultation with various stakeholders.
In a statement yesterday, Mboweni assured following the 5th New Development Bank board of governors’ virtual meeting that structural reforms were part of the government’s economic recovery plan.
“South Africa acted timeously in introducing measures to mitigate against the spread
of the virus, including implementing a state of national disaster, national lockdown,
and social distancing,” Mboweni said.
“We have also been working on a national recovery package, which will include putting
in place the much needed structural reforms.”
Last year, the government embraced the ideas contained in the National Treasury’s document “Towards an Economic Strategy for South Africa”, but its implementation was hampered by
The plan calls for strengthening the macroeconomic framework to deliver certainty, transparency and lower borrowing costs, focusing spending on education, health and social development, modernising “network industries” and restructuring the State-owned enterprises.
It also wants the government to open markets to trade with the rest of the continent, implement a re-imagined industrial strategy, lower the cost of doing business, and focus on job-creating sectors, such as agriculture and tourism.
The plan also called on the government to leverage the private sector as far as possible, which has been evident with the pledges made into the Solidarity Fund.
Reports have emerged that Ramaphosa is said to have told an extended meeting of the ruling party’s National Working Committee on Monday that he needed to raise R1-trillion immediately to cushion the impact of Covid-19.
South Africa’s already high unemployment rate is set to skyrocket this year as the Reserve Bank forecast that as much as 370 000 jobs will be lost and 1 600 small businesses go insolvent.
The Covid-19, which has infected 3 300 people and killed 58 others, has grind the economy to a halt and shattered the already frail activity, with gross domestic product (GDP) forecast to decline to unprecedented levels.