- President Cyril Ramaphosa on Monday said he was encouraged by areas of agreement between business and the ANC’s proposal for an economic recovery.
- Ramaphosa said in the coming weeks, the state will work with social partners to finalise a recovery plan.
- News24 looked at how the ANC and Business for South Africa’s economic recovery plans compare.
President Cyril Ramaphosa said he is encouraged by the significant areas of agreement between business and the ANC’s proposals for an economic recovery for the country.
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In his weekly newsletter on Monday, Ramaphosa said the Covid-19 pandemic had brought about severe economic damage and joblessness, and the work to recovery, therefore, had to start immediately.
He added the country did not lack plans, but should “speed up the pace of implementation”.
“In the coming weeks, we will work with our social partners to finalise an economic recovery programme that brings together the best of all the various proposals,” Ramaphosa said.
News24 looked at how the ruling ANC’s Reconstruction, Growth And Transformation: Building A New, Inclusive Economy discussion document and Business For South Africa’s A New Inclusive Economic Future for South Africa, both released in July, compare:
On infrastructure-led growth:
ANC: “Infrastructure programmes, including interventions in network industries, should serve as a basis immediately to ignite [an] economic recovery.”
Business for South Africa: “A recurring conclusion across nearly all sectors is that infrastructure is a key enabler which must be addressed with urgency if businesses are to deliver inclusive growth.”
On private funding:
ANC: “The mobilisation of funds for increased investment in infrastructure and key productive sectors will inevitably require a combination of public and private resources.”
Business for South Africa: “Given the current fiscal constraints, it will be necessary to prepare and package [infrastructure projects] so that they are attractive for domestic and foreign capital in order to allow the government to obtain maximum leverage from its limited financial resources.”
On spectrum:
ANC: “Decisive progress will be required in telecommunications reform, including expediting digital migration and spectrum allocation to reduce data costs for households and firms.”
Business for South Africa: “Digital migration, permanent allocation of spectrum, and network sharing” can contribute R15 billion per year in economic growth, and create more than 55 000 jobs per year.
On agriculture:
ANC: “The medium- to long-term focus should revert to a sharper and more concerted effort in addressing structural and fundamental issues that have affected South Africa’s agricultural sector pre-Covid-19.
These include the expansion of primary agriculture, improvement of rural infrastructure, direct incentives targeted at where they are likely to have the greatest impact; greater investment in the sector and strengthening black participation at both farm, inputs, and agro-processing levels of the value chain.”
Business for South Africa: “Cannabis industrialization, which has a wide product use, [and] improved access to finance and enabling infrastructure” which can create 60 000 jobs per year.
On manufacturing:
ANC: “Equally, as many economies are forced to look inward, this presents opportunities to rebuild local industry, strengthen local manufacturing and drive import substitution.”
Business for South Africa: “It is also a necessary condition for attracting investment and establishing a strong manufacturing base in the country along with industries of the future which will enable productivity gains and support exports going forward.”
On energy provision:
ANC: “With regards to Eskom, the agreed restructuring process, unbundling Eskom into generation, transmission and distribution entities, must be implemented in order to ensure competitive electricity prices, universal access, more efficient services and implement a new energy mix to ensure a just energy transition as outlined in the Integrated Resource Plan.”
Business for South Africa: “Address Eskom’s operating capital structure and update the Integrated Resource Plan. Embrace the gas economy and revise IRP gas to power targets.” Business for SA says this can protect 500 000 jobs, and create an additional 88 000 more.
On public transport:
ANC: “An efficient transportation system is a critical component of economic activity. Transport availability can either boost or halt economic growth… Ongoing engagement with the taxi industry, which transports a large portion of commuters, is required with a view to accelerate transformation and genuine empowerment within the industry.”
Business for South Africa: “Others are less evident but equally important, such as the need to establish and/or expand effective public transport, not only to reduce crowding in minibuses but also to lower the cost of transport for the poorest members of society.”
On policy:
ANC: “To lead this process, South Africa’s Presidency should be strengthened to play a decisive role in economic policy co-ordination and, working in close liaison with government’s economic cluster, should closely monitor and manage effective policy execution.”
Business for South Africa: “Absent decisive leadership and action, South Africa will not be able to escape the pernicious effects of policy uncertainty, corruption, lack of accountability, and a lack of capacity which were all evident prior to the crisis.”
On education:
ANC: “Skill the youth in data processing, internet of things, blockchain, and computer education to allow young people to build and operate digital technologies.”
Business for South Africa: “Total factor productivity is low, given the shortfalls in education, which have resulted in the country deriving negative benefits from its young workforce.”
On corruption:
ANC: “There is a need to focus on how public resources are being spent and how they can be better spent to drive inclusive economic expansion. The effectiveness of fiscal resources through non-wastage, elimination of corrupt practices, over-pricing, illicit capital flows and effective collection of taxes is critical.”
Business for South Africa: “Visible steps to improve government effectiveness, to root out corruption and maladministration in society, and to establish eight coherent, stable and constructive policies will restore business confidence, spur innovation, mobilise investment and drive job-rich economic growth.”
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