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Everything you need to know about how Ramaphosa plans to fix the economy

The economy took centre stage on Thursday night as President Cyril Ramaphosa delivered his State of the Nation address in Cape Town. From saving Eskom to cutting red tape and ensuring that data must fall, here's everything you need to know.

1. Priorities

Ramaphosa announced the seven priorities he said his new administration will focus on. These are: 

  • Economic transformation and job creation
  • Education, skills and health
  • Consolidating the social wage through reliable and quality basic services
  • Spatial integration, human settlements and local government
  • Social cohesion and safe communities
  • A capable, ethical and developmental state
  • Being part of a better Africa and world.

2. On fixing Eskom

The president announced that government will urgently table a special appropriations bill to allocate a "significant portion" of the R230bn fiscal support the power utility will require over the next few years sooner rather than later. Further details on this would be revealed by Finance Minister Tito Mboweni.

Following the resignation of its CEO Phakamani Hadebe in late May, a new Eskom head is yet to be appointed. 

The president said government will "soon" appoint a chief restructuring officer at the power utility who will be expected to "reposition Eskom financially with careful attention to the mix between revenue, debt and cost structure of the company". Mboweni had announced the creation of the role during his Budget in February. 

Ramaphosa added that government was also working with Eskom to address its overall debt as well as the debt owed by municipalities and individuals.

 

3. On expanding productive sectors

Ramaphosa said government would give priority to economic sectors that have the greatest potential for growth. These include clothing and textiles, gas, chemicals and plastics, renewables, and steel and metals fabrication sectors.

Additionally, the focus will also be on agriculture and the agro-processing sector by developing new markets and reducing SA's reliance on agricultural imports.

4. Bringing economic development to communities

Government plans to create special more economic zones and "revive local industrial parks, business centres, digital hubs and township and village enterprises".

5. Renewal of SA's brand

Ramaphosa said tourism would continue to be a key focus area for his administration. This means a renewal of the SA brand, as well as introducing a "world-class visa regime" with a special focus on the Chinese and Indian markets.

 

6. On ensuring that data must fall

Ramaphosa announced the communications minister will issue the policy direction to The Independent Communications Authority of South Africa (Icasa) to commence the spectrum licensing process. 

This process will include measures to promote competition, transformation and inclusive growth of the sector.

"This is a vital part of bringing down the costs of data, which is essential both for economic development and for unleashing opportunities for young people. We call on the telecommunications industry further to bring down the cost of data so that it is in line with other countries in the world," he said. 

 

7. On intensifying investment and cutting red tape

Ramaphosa said that, of the R300bn of investments pledged at his inaugural investment conference in 2018, over R250bn worth of projects had entered an implementation phase.

He said that a second SA Investment conference will be held from November 5-7 in 2019.

"We are urgently working on a set of priority reforms to improve the ease of doing business by consolidating and streamlining regulatory processes, automating permit and other applications and reducing the cost of compliance."

 

8. On infrastructure, construction

The president announced that government would take a new approach to infrastructure development.

"It includes a special package of financial and institutional measures to boost construction and prioritise water infrastructure, roads and student accommodation through a more efficient use of budgeted money. As announced at the previous SONA, government has set aside R100bn to seed the Infrastructure Fund".

Ramaphosa said government was working towards institutionalising the fund, which will be managed by the Development Bank of Southern Africa.

9. Local is lekker

The president said that within the next year, government hopes to conclude agreements with retailers to stock more South African goods on their shelves to actively promote South African products. He boasted of wearing a suit made by a Cape Town company.  

10. On jobs

Government hopes to create two million new jobs for young people within the next decade, said Ramaphosa. "This plan will work across government departments and all three tiers of government, in partnership with the private sector," he said.

Government hopes to continue to provide employment through the Expanded Public Works Programme, as well as ensuring that young people are employed in social economy jobs such as early childhood development and health care.

The National Youth Service will be expanded to take on 50 000 young people a year and government will also support tech-enabled platforms for self-employed youth in rural areas.

 

 

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WATCH: Opposition parties demand plans for the economy, jobs and land ahead of SONA

President Cyril Ramaphosa delivered his second State of the Nation Address of the year on Thursday.

Fin24 

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