Ramaphosa's plans for saving the SA economy
CAPE TOWN - After winning control of the ANC as its newly-elected President, Deputy President of South Africa, Cyril Ramaphosa now faces the task of rebuilding a beleaguered economy.
Ramaphosa promised to promote growth, improve investor confidence and tackle a disheartening 28% unemployment rate.
Ramaphosa will be the ANC’s presidential candidate in the 2019 elections but could possibly take over running the country even sooner, should President Jacob Zuma make an early exit.
Create 1 million jobs within five years
According to Ramaphosa’s plans, jobs will become the highlight of government policy. Special economic zones will be established and tax reforms introduced to encourage manufacturers to hire.
The government will also repair its relationship with the mining industry and provide it with greater policy certainty to persuade them to take on more workers. In addition to this, a youth-employment program will be scaled to provide 1 million paid internships to unemployed people within 3 years.
Growth and investment
The government will focus on 3% economic growth in 2018. This is a 0.7% increase from 2017 and projected up to 5% by 2023.
In order to achieve this, government will take high-priority measures to restore investor confidence, improve institutional stability and restore the credibility of the criminal-justice system. This will hopefully demonstrate that the state has the political will to turn the country’s finances around.
Debt and spending
Ramaphosa revealed his plans to ensure that government avoids an unsustainable debt level. He will exercise fiscal discipline to ensure that resources are utilised for development, instead of servicing debt.
State of the economy
Ramaphosa promises that the transfer of ownership and control of the economy to black South Africans will be escalated under his plan and leadership. The government will investigate measures on how to make black economic empowerment more effective and sustainable. All of these attempts, in a bid to ensure that communities and workers attain greater benefit.
Competition in the banking industry will also be promoted. This will broaden access to financing and consider establishing a new fund backed by investors, lenders and private companies to small and medium sized businesses (SME’s).
Cost of doing business
The cost of doing business will be reviewed to make them more convenient. Energy prices will be more regulated and port tariffs will be reviewed. Infrastructure will be improved.
There will also be a R1.5 trillion spend injection on new roads, power stations, ports and other capital projects over five years.
A presidential panel will drive the implementation of large projects, reduce costs and root out corruption.
Ramaphosa’s plan would arrange for government to work with teacher unions to improve the quality of schooling, especially in township and rural areas. Additional training and support will also be given to teachers. However, mathematics and science may be compulsory until matric.
The state would also take steps to provide free tertiary education to the poor.
Management of state companies
State companies will be properly governed, managed and operated for the benefit of the public. These companies will also ensure that suitable boards and executives with the necessary skills and qualifications are appointed.
The government will consider forming a company to manage all its investments in state-owned enterprises.
Clamp down on graft
A judicial commission of inquiry will be established to investigate allegations that public institutions have been looted and that private companies and individuals have gained undue influence over the state.
Law-enforcement agencies will be strengthened and critical state institutions will be rebuilt. Officials who have facilitated or been involved in graft will be immediately be removed from their posts and face prosecution.
Stolen funds will be recovered and deposited in a special fund that will be used for youth training and employment.
Meanwhile, The South African Federation of Trade Unions (Saftu) expressed their discontent of Ramaphosa's victory.
According to Saftu, the poor and working class have "no reason to celebrate" Ramaphosa's election as the new ANC leader.
This comes after Saftu Acting Spokesperson, Patrick Craven said on Monday that his federation of unions "has no confidence in new ANC leadership".
"None of the major problems facing the majority of South Africans will be any closer to a solution as the leadership is placed in the hands of a multi-billionaire who has been reported at one stage to be sitting on boards of over 100 private companies".
"The immediate positive response of the money markets and business leaders is a clear indication of who will be celebrating today. Big business has one of their own at the head of the ruling party. They will see more of the same market-friendly economic policies as the National Development Plan which he has championed", said Craven.
Despite Saftu's concerns, the rand responded well to the change in leadership.
The rand responded well strengthening against the US dollar the election of the 65-year-old former union leader and businessman. At the close of business on Monday the rand was trading 2.6% firmer at 12.75/dollar as of 1749 GMT.
Craven said that although the strengthening rand may soften ratings agencies decision to downgrade the economy to junk status, this does not convince workers that more jobs will materialise and a more equal society as a whole.
- BUSINESS REPORT ONLINE