'Social compact for economic recovery'
JOHANNESBURG - President Cyril Ramaphosa threw caution to the wind last night, opening more sectors of the economy but insisting that the country was still way behind the Covid-19 levels.
Ramaphosa endorsed the country’s economic recovery plan, agreed to by social partners at the National Economic Development and Labour Council (Nedlac) a few hours earlier, charging that the priority would be resuscitating debt-ridden Eskom. The plan will be finalised in the next few weeks as the government has eased the lockdown restrictions to allow more economic activity.
He said Cabinet would flesh out the reconstruction and recovery action plan aimed at helping to revive the economy after it plunged by a record annualised 51percent in the second quarter.
The plan commits the social partners to mobilising funding to address Eskom’s financial crisis so that it generates electricity at affordable prices for communities and industries.
“Following several weeks of engagements, the social partners at Nedlac have made tremendous progress on an ambitious social compact for economic recovery,” Ramaphosa said.
“This represents a historic milestone for our country, demonstrating what can be achieved when we unite to confront an urgent crisis.
“The reconstruction and recovery will be finalised, but it will also build on the R500billion economic-social relief package we announced in April which has provided vital support for households, companies and workers.”
Earlier, the Organisation for Economic Co-operation and Development revised the country’s growth prospects, saying it would be among he worst hit the by the Covid-19 pandemic.
Ramaphosa said the recovery plan would be directed towards building confidence and placing the economy on a path of investment and growth. The plan had been considered and finalised by Cabinet.
He said the plan identified priority areas for rebuilding the economy, as well as structural reforms and other programmes for inclusive growth and job creation.
Ramaphosa said more than R30bn in additional support had been provided directly to more than 16million people from poor households, and more than 800000 companies had benefited through the Unemployment Insurance Fund wage support scheme.
“Adjustments have been made to the Loan Guarantee Scheme to make it easier for companies of any size to access credit at low interest rates, with repayments delayed for as much as 12 months,” he said.
“We encourage all companies who have faced a disruption of their earnings to seek support from this scheme while the economy recovers.”