DURBAN - All in all, we have mixed feelings surrounding the tabling of the President’s new economic recovery plan.
As it stands, it appears to be more of a lofty wish list than a concrete policy plan, that skirts around the economic reality of South Africa.
Whilst the significant boost in infrastructure development and increased focus on employment creation is greatly needed- very little detail was provided as to how government plans to finance the ambitious goals that the plan outlined. We remain sceptical surrounding the fundability of these projects.
Furthermore, driving down unemployment by boosting public employment opportunities via schools, municipalities and museums further compounds the already high public wage bill. There was a little talk about barriers to entry and ease of doing business, and little detail surrounding government’s thoughts on the quagmire of policies hindering the private sector. Positively however, we welcome the strong rhetoric surrounding corruption and state capture, and that there will be some form of SOE privatisation (and most notably increased competition for the likes of Transnet). Overall however, the policy remains light on wider SOE reform.
Nevertheless, what remains the most concerning was the limited mention on any feasible policy implementation framework. South Africa unfortunately has a long history of policy misalignment and incoherence- as always the devil is in the detail. Rolling out a national plan such as this successfully at the local level will be tricky indeed.
Casey Delport, Investment Analyst at Anchor Capital
BUSINESS REPORT ONLINE