Can Cyril’s plan res­cue SA?

■ Op­po­si­tion par­ties ques­tion where money will come from ■ Cosatu says 800,000 jobs tar­get not enough

The Herald (South Africa) - - Front Page - No­maz­ima Nkosi and Michael Kim­ber­ley nkosino@the­herald.co.za

Pres­i­dent Cyril Ramaphosa’s plan to re­build the SA econ­omy, promis­ing 800,000 jobs at a cost of R100bn over three years to get the coun­try on a new growth path, was met with scep­ti­cism yes­ter­day.

While op­po­si­tion par­ties ques­tioned where the money would come from and crit­i­cised how the plan lacked time frames, labour fed­er­a­tion Cosatu said the 800,000 jobs tar­get was in­ad­e­quate in a coun­try bat­tling an un­em­ploy­ment cri­sis.

Ac­cord­ing to Stats SA, more than two mil­lion South Africans lost their jobs between April and June 2020.

Ramaphosa said the gov­ern­ment would spend more than R14bn in this fis­cal year alone cre­at­ing about 800,000 job and eco­nomic op­por­tu­ni­ties in a pro­gramme that would build on ex­ist­ing pub­lic works pro­grammes and cre­ate new ones.

He out­lined the plan in par­lia­ment yes­ter­day af­ter a sev­en­month-long Covid-19 lock­down that rav­aged the econ­omy, re­sult­ing in scores of busi­nesses clos­ing shop while push­ing more than 2.2-mil­lion ci­ti­zens into the ranks of un­em­ploy­ment na­tion­ally.

In the Eastern Cape, the con­tin­ued jobs blood­bath has sharply raised un­em­ploy­ment to 52.8%, up from 48.9% in the first quar­ter, ac­cord­ing to the Quar­terly Labour Force Sur­vey re­leased ear­lier this month.

Ad­dress­ing the hy­brid sit­ting of par­lia­ment, Ramaphosa said the gov­ern­ment had re­solved to be a key driver of new em­ploy­ment op­por­tu­ni­ties, ar­gu­ing this had proven to be more ef­fec­tive in stim­u­lat­ing job cre­ation dur­ing crises.

“Large-scale job in­ter­ven­tions driven by the state and so­cial part­ners have proven ef­fec­tive in many coun­tries that have faced devastatio­n from wars and other crises,” he said.

“We have com­mit­ted R100bn over the next three years to cre­ate jobs through pub­lic and so­cial em­ploy­ment as the labour mar­ket re­cov­ers.

“This starts now, with more than 800,000 em­ploy­ment op­por­tu­ni­ties cre­ated in the months ahead.

“The em­ploy­ment stim­u­lus is fo­cused on those in­ter­ven­tions that can be rolled out most quickly and have the great­est im­pact on eco­nomic re­cov­ery,” he said.

Of the 800,000 promised jobs, 300,000 would go to un­em­ployed ma­tric­u­lants to be hired as as­sis­tants to pub­lic school teach­ers.

The aim was to re­lieve teach­ers of the added Covid-19 re­lated re­spon­si­bil­i­ties such as en­sur­ing class­room hy­giene and daily health screening of pupils, with the teacher’s as­sis­tant earn­ing at least a min­i­mum wage of R3,500 a month.

Ramaphosa also out­lined that there would be mas­sive in­fra­struc­ture projects to cre­ate the des­per­ately needed jobs.

A grin­ning Ramaphosa also vowed to per­son­ally en­sure there would be no po­lit­i­cal in­ter­fer­ence in how the funds would be spent.

Eastern Cape pre­mier Os­car Mabuyane wel­comed the re­cov­ery plan.

“It in­spires hope that our econ­omy will bounce back.

“We just need to en­sure the agility, ef­fi­ciency and ef­fec­tive­ness of the state in re­sponse to the plan.

“We agree that the ex­pan­sion­ary fis­cal ap­proach is what we need to stim­u­late the econ­omy of the coun­try.”

But eco­nomics pro­fes­sor Charles Wait and UDM leader Bantu Holomisa were not con­vinced.

Wait said he be­lieved the 800,000 jobs fig­ure was am­bi­tious and would be for peo­ple who were largely un­em­ploy­able any­where else as they lacked skills.

“I took it to be low-skilled jobs and not peo­ple that are be­ing skilled for the fourth in­dus­trial rev­o­lu­tion,” he said.

Wait said the push to spend R100bn to help cre­ate the jobs was cor­rect in the­ory.

“It is bet­ter than sim­ply dish­ing out grants.”

How­ever, he warned that the in­fra­struc­ture projects would need to be closely mon­i­tored on who was em­ployed.

“If you bring peo­ple from Sut­ter­heim to Port El­iz­a­beth there will be fric­tion. They won’t be wel­comed in the city. He will be obliged to em­ploy lo­cal peo­ple.”

He doubted that Ramaphosa would be able to keep the projects away from po­lit­i­cal in­ter­fer­ence.

Holomisa de­scribed the plan as yet another prom­ise by the state, say­ing even for­mer pres­i­dent Thabo Mbeki had failed to erad­i­cate the bucket sys­tem and mud schools in the Eastern Cape as he had promised.

He also ques­tioned where the money would be com­ing from.

“To be hon­est I don’t trust th­ese peo­ple,” he said.

“Just the other day they were telling us there is no money hence they went to the IMF to bor­row money for Covid-19.

“But the way Cyril was speak­ing you would swear we have bil­lions stuck some­where.

“One would have to wait for the Na­tional Trea­sury to come up with time frames and where the money will be com­ing from be­cause for now this is just talk, talk.”

Nel­son Man­dela Bay Busi­ness Cham­ber CEO Nomkhita Mona said the 800,000 promised jobs would of­fer short-term re­lief, which might not nec­es­sar­ily trans­late into medium- to long-term so­lu­tions for un­em­ploy­ment and un­der­em­ploy­ment.

“More de­tail is needed to un­der­stand how th­ese short­term eco­nomic mea­sures would be used as a spring­board for sus­tain­able eco­nomic growth.

“While no sin­gle ini­tia­tive or eco­nomic sec­tor can or should be re­lied upon to sus­tain­ably re­solve SA’s per­va­sive

struc­tural un­em­ploy­ment, the cham­ber sup­ports the call for mas­sive in­fra­struc­ture de­vel­op­ment and rein­dus­tri­al­i­sa­tion to be the cor­ner­stones of the coun­try’s post-Covid-19 eco­nomic re­cov­ery plan.”

Ramaphosa also promised to ad­dress SA’s en­ergy cri­sis in two years.

He said the gov­ern­ment would be ac­cel­er­at­ing the im­ple­men­ta­tion of the In­te­grated Re­source Plan to pro­vide a sub­stan­tial in­crease in the con­tri­bu­tion of re­new­able en­ergy sources, bat­tery stor­age and gas tech­nol­ogy.

This should bring about 11,800MW of new gen­er­a­tion ca­pac­ity into the sys­tem by 2022.

More than half of that en­ergy would be gen­er­ated from re­new­able sources, he said.

“We are tak­ing fur­ther steps to en­able power gen­er­a­tion for own use,” Ramaphosa said.

Wait said the Bay at least looked likely to ben­e­fit from

Ramaphosa ’ s en­ergy se­cu­rity prom­ise.

“Our lo­cal sit­u­a­tion with con­stant out­ages not linked to load-shed­ding would surely ben­e­fit.”

Mona said that dur­ing the medium term, en­ergy se­cu­rity in SA was pos­si­ble if the reg­u­la­tory frame­work was adapted to rapidly fa­cil­i­tate new gen­er­a­tion projects.

DA fi­nance spokesper­son Ge­ordin Hill-Lewis said Ramaphosa’s speech was full of jar­gon, and at times turgid.

“Most im­por­tantly, Pres­i­dent Cyril Ramaphosa did not close the cred­i­bil­ity gap between promised re­form and ab­sent ac­tion.

“He needed to show ex­actly how, and when, the promised re­forms would be achieved.”

Cosatu na­tional spokesper­son Sizwe Pamla agreed with Ramaphosa that the eco­nomic cri­sis needed all so­cial part­ners to work to­gether to re­build the econ­omy.

“More work is needed and in par­tic­u­lar as to what the pri­vate sec­tor is go­ing to do to pre­vent re­trench­ments and to ramp up jobs.”

Mona said the ease of do­ing busi­ness in any coun­try was a crit­i­cal com­po­nent of in­vest­ment pro­mo­tion.

“It would there­fore be pru­dent for the gov­ern­ment to foster faster eco­nomic growth by en­sur­ing that the ba­sics are in place, thus cre­at­ing a con­ducive en­vi­ron­ment for busi­nesses to thrive.

“In essence, a thriv­ing pri­vate sec­tor is what drives sus­tain­able job cre­ation.”

Turn­ing to the tourism sec­tor which has been dev­as­tated by the lock­down, Ramaphosa said to sup­port the in­dus­try over this peak tourism sea­son, the gov­ern­ment would shortly be pub­lish­ing an ex­panded list of coun­tries from where re­sump­tion of in­ter­na­tional travel would be per­mit­ted, which would be sup­ported by tar­geted mar­ket­ing in part­ner­ship with the pri­vate sec­tor.

He also an­nounced that the spe­cial R350 Covid grant had been ex­tended.

“We will ... be ex­tend­ing the spe­cial Covid-19 grant by a fur­ther three months‚” he said.

“This will main­tain a tem­po­rary ex­pan­sion of so­cial pro­tec­tion and al­low the labour mar­ket suf­fi­cient time to re­cover.”

Ramaphosa’s eco­nomic re­cov­ery plan comes two weeks af­ter the Bay coun­cil passed its own plan to re­boot the re­gional econ­omy.

Coun­cil ap­proved a bud­get of R30m while the Bay CFO Sel­wyn Thys on Wed­nes­day said R15m was re­served in the bud­get.

The city’s re­cov­ery plan wants to of­fer tax and rates in­cen­tives for big busi­nesses, as­sist dis­tressed firms to ac­cess debt-re­lief from banks and speed up the de­vel­op­ment of cat­alytic projects.

‘More work is needed and in par­tic­u­lar as to what the pri­vate sec­tor is go­ing to do to pre­vent re­trench­ments and to ramp up jobs’

‘Most im­por­tantly, Pres­i­dent Cyril Ramaphosa did not close the cred­i­bil­ity gap between promised re­form and ab­sent ac­tion. He needed to show ex­actly how, and when, the promised re­forms would be achieved’

Pic­ture: ESA ALEXAN­DER

SPELL­ING IT OUT: Pres­i­dent Cyril Ramaphosa presents the South African eco­nomic re­con­struc­tion and re­cov­ery plan yes­ter­day

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