Government plans to create 800 000 jobs
Robust pipeline of projects to transform cities
JOB creation took centre stage when President Cyril Ramaphosa tabled the reconstruction and recovery plan in Parliament yesterday, saying the government was determined to create and support more than 800 000 work opportunities in the immediate term.
More than 2 million people lost their jobs in the second quarter of this year while the country’s economy contracted by 16.4% compared with the previous quarter. A significant shortfall in revenue collection was also expected.
“We must get our people back into the jobs they lost in the pandemic. We are determined to create more employment opportunities for those who were unemployed before the pandemic or who had given up looking for work.
“This means unleashing the potential of our economy by, among others, implementing necessary reforms, removing regulatory barriers that increase costs and create inefficiencies in the economy, securing our energy supply, and freeing up digital infrastructure,” Ramaphosa said.
The plan was to respond to the immediate economic impact of Covid19 by driving job creation and expanding support for vulnerable households.
“We aim to do this primarily through a major infrastructure programme and a large-scale employment stimulus, coupled with an intensive localisation drive and industrial expansion.”
The interventions outlined are aimed at achieving sufficient, secure and reliable energy supply within two years, unlocking more than R1 trillion in infrastructure investment over the next four years and reducing data costs for every South African and expanding broadband access to low-income households.
The implementation of the plan will raise growth to about 3% on average over the next 10 years, according to the modelling done by National Treasury.
“The economic reconstruction and recovery plan recognises that to support a rapid economic rebound, South Africa needs to focus on a few highimpact interventions and ensure they are executed swiftly and effectively.
“Infrastructure has immense potential to stimulate investment and growth, to develop other economic sectors and create sustainable employment both directly and indirectly.
“We have developed a robust pipeline of projects that will completely transform the landscape of our cities, towns and rural areas. By the end of June 2020, we had 276 catalytic projects with an investment value of R2.3 trillion. Moreover, a list of 50 strategic integrated projects and 12 special projects was gazetted in July 2020,” he said.
The government has established Infrastructure SA and the Infrastructure Fund with the capacity to prepare and package projects, to ensure active implementation of the infrastructure build programme.
The government made an aboutturn on the unemployment grant which was set to be discontinued. Ramaphosa announced that the R350 grant would be extended for another three months. October was set to be the last month for payment of the grant to the unemployed.
Opposition parties said the country was at a crossroads and the plan was not new. They also said that the 800 000 jobs would not make up for the 2.2 million jobs lost in the second quarter.
DA finance spokesperson Geordin Hill-Lewis said: “He needed to show exactly how, and when, the promised reforms would be achieved. Without this detail, the president will get zero benefit of the doubt.”
UDM chief whip Nqabayomzi Kwankwa said Ramaphosa would not achieve the 3% growth in the next few years.
IFP MP Mzamo Buthelezi said Ramaphosa did not provide specific details on infrastructure projects that MPs wanted to hear.
PRESIDENT Cyril Ramaphosa yesterday unveiled his much anticipated economic recovery plan that he said would be underpinned by a R1 trillion investment in critical infrastructure over the next four years, a stable energy supply in two years and an implementation committee of Cabinet ministers to see it through.
Ramaphosa told a joint sitting of the National Assembly and the National Council of Provinces the economic reconstruction and recovery plan was aimed at creating jobs and to boost economic growth and activity in the medium term.
He said the plan would create more than 800 000 employment opportunities and respond to the immediate economic impact of Covid-19 by driving job creation and expanding support for vulnerable households.
“We aim to do this primarily through a major infrastructure programme and a large-scale employment stimulus, coupled with an intensive localisation drive and industrial expansion,” Ramaphosa said.
At least 2.2 million jobs were lost between April and June when the economy shrunk by an annualised 51 percent due to the Covid-19 induced national lockdown.
Ramaphosa said energy security would be realised within two years with additional supply accelerated to address electricity constraints.
He described the instability of the grid as the largest constraint to growth and a deterrent to investments.
Ramaphosa said the recovery plan would also focus on infrastructure build programmes such as schools, water, sanitation and housing, and also on critical network infrastructure like ports, roads and rail. He said the government had taken steps to remove the constraints that have hampered infrastructure delivery in the past.
Ramaphosa said the Infrastructure Fund would provide R100 billion in catalytic finance over the next decade, leveraging as much as R1trln in new investment for strategic projects.
He said the second key priority intervention in the plan is rapidly expanding energy generation capacity to shore up the struggling Eskom’s grid. Ramaphosa reiterated that the current regulatory framework would be adapted to facilitate new generation projects while protecting the integrity of the national grid.
“We are taking further steps to enable power generation for ownuse. Applications for own-use generation projects are being urgently fast-tracked,” he said.
Ramaphosa also announced an employment stimulus for large-scale job interventions and industrial growth as other key priority economic interventions.
He said the employment stimulus was focused on those interventions that can be rolled out most quickly and have the greatest impact on economic recovery.
These would include expanding public employment at the provincial and city level, and 300 000 opportunities for young people to be engaged as education and school assistants, among other job opportunities.
“The implementation of the employment stimulus has already commenced,” Ramaphosa said.
He said that the government will support the ramping up of local production, following a steady decline of the manufacturing base over many years, to make South African exports much more competitive.
He said South Africa currently imported around R1.1trln of goods, excluding oil, each year.
Ramaphosa said that if just 10 percent of these goods were manufactured locally, it was estimated that this could add 2 percentage points to South Africa’s annual gross domestic product. “It is to realise this huge potential that the social partners have agreed to prioritise a range of consumer and industrial products for local procurement,” he said.
“We will enforce government policies to ensure that all public infrastructure projects use locally-made materials, including steel products, cement, bricks and other components.”