Mbeki Foundation calls for reworking of economic plan

Former president Thabo Mbeki. Picture: Nhlanhla Phillips/African News Agency (ANA) Archives

Former president Thabo Mbeki. Picture: Nhlanhla Phillips/African News Agency (ANA) Archives

Published Feb 8, 2021

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Johannesburg - The Thabo Mbeki Foundation (TMF) has urged the government to rework South Africa's Economic Reconstruction and Recovery Plan (ERRP) as it was not implementable in its current form.

President Cyril Ramaphosa released the ERRP late last year as part of ensuring the reconstruction and recovery of the economy which was damaged by the Covid-19 pandemic.

At the heart of the plan’s aims is the recovery of the economy and job recreation through aggressive infrastructure investment, re-industrialisation, localisation and export promotion, bolstered through resource mobilisation and the strengthening of the state’s capacity.

However, the TMF has pointed out that while the government’s effort was commendable, the ERRP suffered from several shortcomings and it was more of a vision than a specific implementable plan.

The foundation said it was also clear that the social partners at Nedlac had not reached consensus as the government had pointed out, and that this was reflected by the production of a separate and more practicable plan, the Accelerated Economic Recovery Strategy (AERS), which was produced by Business 4 SA on behalf of organised business.

“Given the foregoing, the framing of the government document suggested that contrary to what the President (Ramaphosa) had said in his parliamentary address, in fact there was no substantive Nedlac agreement on economic reconstruction and recovery,” the TMF said.

The foundation has recently penned a discussion document on South Africa’s social compacting and economic recovery, with special focus on the ERRP.

The TMF said while the government had emphasised the need for social compacting, it had become clear that there was still no Nedlac agreement on economic reconstruction.

The foundation said the government had to incorporate the AERS plan into its 10-year ERRP, as it was a three-year implementable plan with the projected creation of 1.5 million jobs and an investment of R1 trillion from business.

“Among other notable things is the fact that this is the very first time during the 26 years of our democracy that business has come together to make a public and solemn commitment to invest in the South African economy,” the TMF argued.

The foundation has called for Nedlac to reconvene this year and conclude a workable plan, which had also to include the proposals made by the Presidential Economic Advisory Council (PEAC) on economic recovery.

“The government and the country must accept that the government’s ... Economic Reconstruction and Recovery Plan, published on 15 October 2020, is essentially a vision, not the required transformative plan,” the foundation said.

Among the proposals made by the PEAC is the need for debt reduction by the state for the long term, dealing with corruption, and building state capacity.

Presidential spokesperson Tyrone Seale had not responded to questions by the time of publication.

Yesterday, Cosatu said Ramaphosa had to provide concrete details on how the ERRP would be implemented as he prepares to deliver the annual State of the Nation Address on Thursday.

Cosatu national spokesperson Sizwe Pamla said the standard of living had deteriorated for the majority of South Africans and the austerity measures that Ramaphosa’s administration had imposed had resulted in reduced social expenditure and the deterioration of public services.

“We do not need new economic plans, but we need details and definitive time frames that will speak to the implementation of the Economic Reconstruction and Recovery Plan (ERRP). The thrust of the State of the Nation Address needs to speak to the rapid implementation of the ERRP. The economy is in deep trouble and unemployment has surged past 50%, and it’s time for less talk and swift action,” Pamla said.

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Cyril Ramaphosa