Nuclear plants, cannabis seen spurring South African revival
JOHANNESBURG – A draft plan aimed at reviving the South African economy in the wake of the coronavirus provides the first hints of how programs ranging from infrastructure investment to improving public transport will be funded.
The government began drafting the plan in conjunction with business and labor groups several months ago in a bargaining forum known as the National Economic Development and Labour Council.
A version that was discussed by the cabinet this week and seen by Bloomberg reiterates calls made in previous drafts for massive spending on power stations and transportation links.
New suggestions include establishing a cannabis industry and building new nuclear plants. The draft envisions R23 billion being allocated to galvanize private investment in infrastructure and R4.5 billion being spent on public transport over the next 12 months, but provides scant detail on where the money will come from.
South African President Cyril Ramaphosa is due to brief lawmakers on the final version of the plan on October 15. It’s unclear if the version presented to the cabinet has received a final sign-off or will be adjusted.
If a plan isn’t implemented there could be a “loss of economic capacity, including collapse of the supply capacity, consumer and business confidence, the labour market and increased vulnerability of the poor”, the plan reads. “The overall plan aims to mitigate these risks.”
The government expects the economy to contract by the most in almost nine decades this year as a result of the virus and a lockdown that was instituted in late March to curb its spread. The numbers of the unemployed have surged and many businesses have closed.