JOHANNESBURG – President Cyril Ramaphosa on Friday laid bare his plans to boost the declining agricultural, manufacturing and tourism sectors and revive South Africa's ailing economy.
The president moved to appease the agitated investor economy with a R50 billion plan he hopes will revive an economy on its knees.
At the forefront of the president's blueprint is aid for the policy certainty-starved agriculture sector and the manufacturing sectors.
“Re-prioritised funding will be directed towards investments in agriculture and economic activity in townships and rural areas. Agriculture has massive potential for job creation in the immediate and long term,” he said.
Agriculture production has fallen by 29.2 percent in the second quarter, following a 33.6 percent slump in the first quarter, and Statistics South Africa has largely attributed this to the decline in the production of field crops and horticultural products.
The agricultural sector is currently stymied by uncertainties on how land expropriation without compensation will unfold. Ramaphosa also beefed-up the Inter-Ministerial Committee on Land Reform by appointing a 10-person panel to advise the government on the implementation of a fair and equitable land reform process.
The panel consists of well-known agricultural economist Sandile Sihlobo and legal luminary advocate Tembeka Ngcukaitobi.
Among other key measures announced by the president to kick-start the economy was a R400bn outlay on infrastructure spending and tackling the troublesome education and health sectors.
“Beyond the investment plan, President Ramaphosa also announced a variety of worthwhile reforms that we think will provide a boost to the economy,” said John Ashbourne, senior emerging markets economist at Capital Economics.
“One essentially cost-free measure was a loosening of visa restrictions on tourists and visiting business people.” South Africa's economy experienced its first technical recession since 2009 after gross domestic product contracted 0.7 percent in the second quarter.
This was after a first quarter 2.2 percent decline was revised upwards to 2.6 percent, with Ramaphoria now firmly in the water.
The jury is still out on the government's latest plan to boost the troubled economy after the 14-point measures announced by erstwhile finance minister Malusi Gigaba fell flat.
Business Unity South Africa (Busa) said it welcomed the appointment of an advisory panel of experts on land reform - the model proved effective when deliberating on the National Minimum Wage and VAT.
“Business has a long-term investment horizon, and President Ramaphosa recognises this reality in his statement. Business welcomes the shift in approach from the government,” said Tanya Cohen, chief executive of Busa.
The economy's underwhelming performance, which has seen Moody’s and the South African Reserve Bank slash their 2018 growth forecasts, has presented Finance Minister Nhlanhla Nene with a dilemma to raise the required revenue, with the tax man already battling a more-than-R48bn tax shortfall.