Four priority inteventions will drive economic growth

During the State of the Nation Address (SONA), President Cyril Ramaphosa said the government will focus on four priority economic interventions. They are: a rollout of infrastructure throughout the country; an increase in local production; an employment stimulus to create jobs and support livelihoods; and the rapid expansion of energy generation capacity, writes Mava Lukani.

On infrastructure, he said: “We knew that to achieve this objective we would need to steadily rebuild technical skills within government to prepare and manage large infrastructure projects. The government has developed an infrastructure investment project pipeline worth R340 billion in network industries such as energy, water, transport and telecommunications. These projects include two major human settlements projects that will provide homes to almost 68 000 households in Gauteng. Similar human settlements projects are planned in other provinces.”

On the creation of new cities, the President said the draft masterplan for a smart city, which will become home to between 350 000 to 500 000 people within the next decade, was completed in November 2020 and is now out for public comment.

Meanwhile, the Infrastructure Investment Plan identifies roads projects worth R19 billion covering the spine of the South African road network. Work is underway to finalise project finance structuring for these projects. Resources have been committed from the fiscus to support the construction and rehabilitation of the major N1, N2, and N3 highways.

On support to increase local production and to make South African exports globally competitive, the President announced that social partners that participated in the development of the Economic Reconstruction and Recovery Plan have agreed to work together to reduce South Africa’s reliance on imports by 20% over the next five years.

As the Covid-19 pandemic forced the closure of global value chains, the government has been able to speed up this initiative as the local supply chains opened to locally manufactured products. To this end, Cabinet approved the SMME [Small, Medium and Micro Enterprises] Focused Localisation Policy Framework, which identified 1 000 products.

Furthermore, the departments of Small Business Development and of Trade, Industry and Competition are supporting SMMEs to access larger domestic and international markets. “These efforts are supported by robust manufacturing support programmes,” he added.

On industrialisation, which is underpinned by sector master plans to rejuvenate and grow key industries, the President reported that four master plans have been completed and signed to

date. These are part of the social compact between labour, business, government and communities and have already had an impact in their respective industries.

Through the implementation of the poultry master plan, the industry has invested R800 million to upgrade production. South Africa now produces an additional one million chickens every week. The sugar master plan was signed during the lockdown, with a commitment from large users of sugar to procure at least 80% of their sugar needs from local growers. “Through the implementation of the plan, last year saw a rise in local production and a decline in imported sugar, creating stability for an industry which employs about 85 000 workers,” he said.