The plan has been months in the making alongside business and labour and hopes to counter the economic damage done by the Covid-19 lockdown

Ramaphosa sets date to unveil economic rescue plan

Source: Business Day 09 OCTOBER 2020

President Cyril Ramaphosa will address both houses of parliament on Thursday to unveil the long-awaited economic recovery plan for the country.

The plan has been months in the making alongside business and labour and hopes to counter the economic damage done by the Covid-19 lockdown and reset the economy for growth. At least 2.2-million people have lost their jobs and SA’s GDP for 2020 is projected to plummet by about 8%.

Early versions of the plan presented to cabinet, as well as Nedlac, contained an extensive set of measures covering every aspect of the economy from energy security to the township economy and trade and localisation of production.

The draft plan reiterates many measures that have been on the government’s to-do list for many years and more intensely so since finance minister Tito Mboweni presented his economic growth plan to the cabinet more than a year ago. The emphasis is expected to remain an infrastructure-led recovery aided by structural reforms, especially of network industries, to provide an enabling environment for investment.

Energy security, which has been a constraint to growth, is given high prominence, with a commitment to speed up self generation by industries and farms and to bring more generation capacity online, in line with the Integrated Resource Plan. There is a special emphasis on gearing up infrastructure to enable a greater use of gas for power as well as an indication that government remains committed to exploring a nuclear build programme.

A mass employment programme is also expected to be included in the final draft as the most significant measure of social support to the unemployed. Additional measures lobbied for by civil society, such as the extension of the top-up of social grants, are not expected to be adopted.

Ramaphosa’s address will precede the tabling of the medium-term budget policy statement by Mboweni a week later, in which further expenditure cuts are expected as the Treasury battles to rein in the debt and manage the deteriorating fiscal framework. Cabinet has also committed to funding the rescue of SAA to the tune of R10.5bn which will necessitate cuts to other programmes.