Tight timelines set for rescue plan

Cabinet backs urgent structural reforms to get economy firing

● The cabinet has adopted an economic recovery plan that sets stringent timelines on urgent action that must be taken to rescue the ailing economy.

This week, an extended cabinet lekgotla was held to discuss the plan and seek commitments from ministers, top government officials and state-owned entity chiefs on its implementation. Its adoption follows months of negotiations at Nedlac between the government, business and labour on the best way to get the economy firing again.

The ANC gave the economic recovery plan the green light at its own lekgotla last week, and President Cyril Ramaphosa has called a joint sitting of both houses of parliament on Thursday to outline the reconstruction and recovery plan.

Stats SA released shocking figures that showed the economy had shed 2-million jobs during the Covid-enforced lockdown, and contracted by 16.4% in the second quarter.

The recovery plan identifies urgent structural reforms, including ensuring reliability of energy supply, enabling generation for own use and long-term action on the unbundling of Eskom into three separate entities. Other key priority interventions include supporting local manufacturing, speeding up digital migration, using infrastructure projects as sites for massive employment programmes and accelerating shovel-ready projects. The plan also outlines the strengthening of revenue collection and reviving the tourism sector, which has the capacity to create thousands of jobs and support small and medium enterprises.

Short-term actions under interventions on crime and corruption include increasing the financial resources of law enforcement agencies and the judicial system to speed up prosecutions, especially against those who have had allegations levelled at them at the Zondo commission. The government will also work with business organisations and law enforcement agencies to prosecute companies that facilitate corruption.

Implementation time-frames for the reconstruction and recovery plan are broken down into action that can be taken within the next six months, 12 months, or after a 12month period, depending on urgency and available funding. Line departments have committed themselves to concrete implementation dates.

For the improvement of energy security, the department of mineral resources & energy has agreed to speed up the implementation of generation for own use and the cushioning of consumers, especially industrial and commercial operations, from load-shedding within six months.

It will also speed up the establishment of gas-to-power projects funded by the private sector and start preparations for a nuclear build programme within the next 12 months.

The department of public enterprises and Nedlac will in the next 12 months work on ensuring the operational and financial sustainability of Eskom, as well as the separation and unbundling of the power utility, alongside the National Treasury.

Through the department of trade, industry & competition the government will work on increasing localisation in manufacturing and strengthening procurement from local suppliers, within the next six to 12 months.

The presidency has committed to working with the department of public works to accelerate the implementation of shovelready projects. The sum of R23bn has already been set aside for projects that are being identified as shovel-ready by the investment and infrastructure office in the presidency. Another R340bn in private sector investment in infrastructure is being sought, with the potential of creating 550,000 jobs.

The government is also looking to create 740,000 jobs through maintenance of state buildings. The department of transport has committed to moving more goods from road to rail, and issuing concessions to private sector players to operate trains on the stateowned rail network.

But while the reconstruction plan promises a broadband rollout, it makes no commitments in terms of the release of spectrum, which telecommunication giants say is essential for reducing data costs. The plan also touches on the reorganisation of stateowned entities, but there are no funding commitments, with the department of public enterprises being tasked with developing a white paper on “government shareholder management”.

A three-phase implementation plan has been agreed to, broken down into immediate, medium term and long term. Monitoring and evaluation will be overseen by the president through the National Coronavirus Command Council, the Nedlac presidential working group, presidential technical advisory team, line departments and designated working groups. Provinces and districts will also create their own implementation plans.

Short-term action includes funds for speeding up prosecutions, especially of those who have had allegations levelled against them at the Zondo commission