The plan includes a defined set of economic reforms covering mining, telecommunications, tourism and transport.
President Cyril Ramaphosa has shared an outline of the economic stimulus package adopted by cabinet to spark economic activity and secure confidence in sectors affected by regulatory uncertainty with South Africa’s business and labour leaders, a statement from his office late on Sunday said.
The presidency said Ramaphosa presented highlights of the package, to be announced publicly soon, during a consultative meeting on Friday that focused on economic recovery, investment and creating jobs. The meeting was a preparatory dialogue ahead of a forthcoming jobs summit and investment conference.
The economy has struggled to grow meaningfully over the past decade, and fell into a technical recession when GDP contracted for the second consecutive quarter in Q2.
The stimulus package will include a defined set of economic reforms covering mining, telecommunications, tourism and transport.
Friday’s meeting also discussed proposals to establish an infrastructure development initiative that draws in private sector funding and delivery expertise and delegates engaged frankly on constraints to growth and entrepreneurship as well as other issues affecting citizens such as safety and security, the Presidency said.
“Social partners urged government to accelerate finalisation of the Mining Charter, spectrum policy and other instances of regulation that hold the potential to make the economy more efficient, agile and competitive,” it said.
Ramaphosa, in turn, appealed to businesses to work with labour and government to prevent job losses.
The Presidency said the social partners had agreed to meet more regularly “to strengthen economic collaboration and take shared responsibility for accelerating the country’s growth trajectory”.
Disappointing economic growth figures and a sharply weaker rand have given South Africans a sharp reality check, demonstrating that while Ramaphosa’s presidency revitalised the country’s sense of optimism, deep-seated structural economic challenges remained, Citadel head of fund research and portfolio manager Yolanda Naudé said.
“For instance, President Ramaphosa’s biggest achievement since winning the [governing] ANC national elective conference last year has been getting elected as president, placing competent leaders into crucial positions and restoring confidence to some extent in government,” she said.
“However, very little else has changed. Ramaphosa has addressed the low-hanging fruit, but without the hard data to support optimism, business and consumer confidence will see a further correction, especially as VAT (value-added tax) and fuel price increases mean less money in consumers’ pockets.”
“President Ramaphosa now needs to seize the opportunity to get South Africa’s house in order while the global economic environment still remains supportive – and fast.”
