CYRIL’S STIMULUS PACKAGE
Land panel unpacked, and the nation reacts to the new deal
Perhaps the most significant thing about President Cyril Ramaphosa’s announcement of a package of measures to stimulate the economy, was what are these days called “the optics”.
Ramaphosa finally appeared like a man who is in command when he took to the podium in Pretoria on Friday to deliver the much-anticipated announcement.
He has, until now, been careful to kick every controversy into touch, saying he would rely on the outcome of consultations to drive his agenda.
But on Friday he was, for the first time, clear and decisive. And he played to a key strength: his ability to organise and direct large operations.
He announced that the disastrous visa regime introduced by then home affairs minister Malusi Gigaba, which discouraged travel to South Africa with red tape, was coming to an end immediately.
He announced that the Mining Charter has been revised to make it more investor friendly and that the much-loathed Minerals and Petroleum Resources Development Act (MPRDA) has been shelved.
He announced that he was taking charge of the land matter – until now under the management of his scandal-plagued deputy, David Mabuza.
It seems to have finally dawned on Ramaphosa that how this issue is shepherded is critical to the country’s economic prospects.
A panel, which included business-oriented leaders and even farmers, will advise him on the way forward.
Perhaps most significantly, he announced a new R400bn SA Infrastructure Fund.
The government will put up R400bn with a view to leveraging investment from the private sector, banks and global financial institutions.
Importantly, Ramaphosa has ruled out borrowing from the International Monetary Fund (IMF), saying he would look to use the New Development Bank instead.
It remains to be seen exactly how this fund will work, but Ramaphosa said business and labour were enthusiastic. He spoke of the fund having a “blended finance kind of character”.
It could be that Ramaphosa is finally going to let the private sector into infrastructure ownership and management, a much-needed step that might finally turn all the decades of promises into actual projects.
As if to underscore this, he announced a dedicated infrastructure team that will “identify and quantify shovel-ready projects, such as roads and dams” to get this going.
All of this is fairly impressive given that Ramaphosa has very little ammo for an economic battle of any kind.
He admitted as much, saying there was no new money to allocate and that all government could do was re-prioritise existing spending.
“We have limited fiscal space to increase spending or increase borrowing … we do not have fiscal space to pour money in the economy…we have to resort to re-prioritising our spending and budget within the current fiscal framework.”
He said such re-prioritisation would address the parlous state of public hospitals, the lack of sanitation in schools and public works opportunities, especially for young job seekers.
These pronouncements on social spending seemed out of place in a speech about economic stimulus, but Ramaphosa is probably trying to show that his measures are not just about high finance – they are also directed at improving the lives of ordinary people.
The rand strengthened prior to and during the announcement, but retraced its steps once the markets began to digest the announcement.
The scepticism is understandable.
The government has made vast infrastructure pronouncements in the past, only to fail to follow up with actual shovels on the ground, as it were.
Ramaphosa must now show he can turn all of this talk into visible action if he wants to demonstrate that he is different to those who came before.
And he played to a key strength: his ability to organise and direct large operations
President Cyril Ramaphosa’s new advisory panel on land reform will support the inter-ministerial committee (IMC) on land reform chaired by Deputy President David Mabuza.
He said on Friday the panel would advise the IMC on a broad range of policy matters associated with land reform, including restitution, redistribution, tenure security and agricultural support.
Land and agrarian reform has been in the spotlight as parliament’s constitutional review committee has been grappling with whether the so-called property clause in the constitution should be amended to allow for expropriation without compensation.
The panel will be chaired by social entrepreneur and public policy and development planning specialist Dr Vuyokazi Mahlati‚ who is serving her second term as a member of the National Planning Commission of SA. Mahlati is also president of the African Farmers’ Association of SA (Afasa).
Mahlati will lead the panel of nine other experts:
● Prof Ruth Hall – a researcher and professor at the University of the Western Cape’s Institute for Poverty‚ Land and Agrarian Studies;
● Mohammed Karaan – a professor in agricultural economics at Stellenbosch University;
● Advocate Tembeka Ngcukaitobi – a lawyer‚ public speaker and author;
● Bulelwa Mabasa – an admitted attorney with experience in matters of land restitution and reform;
● Thandi Ngcobo – CEO and founder of the University of KwaZulu-Natal’s Dr J L Dube Institute;
● Wandile Sihlobo – head of research at the Agricultural Business Chamber of SA and independent agricultural economic adviser to Afgrain Food Group;
● Daniel Kriek – president of Agri SA;
● Thato Moagi – an emerging farmer and entrepreneur;
● Nick Serfontein – chair of the Sernick Group and 2016 Free State Farmer of the Year.
“The panel is expected to provide perspectives on land policy in the context of [persistent] land inequality‚ unsatisfactory land and agrarian reform and uneven urban land development.
The panel is mandated to review‚ research and suggest models for government to implement a fair and equitable land reform process that redresses the injustices of the past‚ increases agricultural output‚ promotes economic growth and protects food security‚” the presidency said.
Ramaphosa first announced the appointment of the 10-person panel in an address on Friday on his new economic stimulus package, in which he emphasised that agriculture had “massive potential” for job creation in the immediate and long term.
“The interventions we have identified will include a package of support measures for black commercial farmers so as to increase their entry into food value chains through access to infrastructure, such as abattoirs and feedlots.”
Furthermore, said Ramaphosa, blended finance will be mobilised from the Land Bank, Industrial Development Corporation (IDC) and commercial banks.
“The Land Bank is currently concluding transactions that will create employment opportunities in the agricultural sector over the next three to five years. A significant portion of the funding will go towards export-oriented crops that are highly labour intensive. Government will finalise the signing of 30-year leases to enable farmers to mobilise funding for agricultural development.” – With Amil Umraw and Bekezela Phakathi