Patel outlines six priority programme areas to boost economy
JOHANNESBURG - Minister of Trade, Industry and Competition (the dti) Ebrahim Patel has announced plans to prioritise saving firms and jobs as the Covid-19 pandemic continues to devastate the South African economy.
Patel told Parliament on Friday that his department’s wider plan included investment in infrastructure-driven growth through building of bridges and roads and clinics.
He outlined six priority programme areas to strengthen economic dynamism, including two new Master plans for the furniture and steel industries and three new agreements on localisation and supplier development.
Patel said his department would also complete talks with the European Union on trade access and strengthen the actions against illegal imports and bring investment projects to fruition, especially in the production of PPEs, medical equipment and pharmaceuticals.
“To prepare for the post-covid world, we will strengthen efforts around reconstruction and recovery, including broader pacts with workers and businesses, focused on saving as many firms and jobs; identifying new opportunities; embracing digital technologies to recover and change; addressing economic inclusion with greater urgency,” Patel said.
South Africa is already assembling the first 20 000 units of a locally-made ventilator machine to complement the existing stock in the public and private healthcare industry, a first on the African continent.
Patel said there could be no return to the ‘old normal’ and that established industries would not be able to create the millions of jobs required.
“The quest for competitiveness must be balanced with the need to nurture economic resilience, the ability of economies to respond to risks that an open and integrated world present: be they to digital systems, or from climate change, or to food security or the spillover of trade wars raging elsewhere, or indeed from pandemics,” he said.
The dti’s budget has been cut quite substantially with R1.8 billion taken off as part of the R130bn reprioritised to respond to the Covid-19 impact.
South Africa faces unprecedented levels of unemployment this year as an estimated 3 million jobs have been lost so far as a result of Covid-19.
The government has revised down its economic growth projections and now expects the economy to contract between 7.3 percent in 2020, the largest contraction in 90 years.
Investec chief economist Annabel Bishop said they expected gross domestic product (GDP) to contract by 10.1 percent this year, a deep recession that has been caused by the lockdown restrictions.
Bishop said the lifting of the remaining restrictions on economic activity, and even the lessening of restrictions in May and June would not give a massive boost to GDP.
“The economic effects of the lockdown has severely lowered the ability and willingness of consumers to spend, and has resulted in many businesses closing permanently or temporarily,” Bishop said.
“Government, business, political parties and other interest groups continue to produce plans for the economy, clearly outlined in a number of these plans, but also argued against by the others, resulting in a stalemate and so little lift in GDP prior to Covid-19.”