South Africa’s president unveils $60bn plan to spice up financial system | South Africa Information
The South African president has launched an ambitious program to create 800,000 jobs and attract more than $ 60 billion in investment over the next four years.
South Africa will undertake major public works and job creation in response to the coronavirus crisis, President Cyril Ramaphosa said Thursday, unveiling a plan to get Africa’s most industrialized economy back on track.
Under pressure after data showed the biggest decline in gross domestic product (GDP) in the second quarter, Ramaphosa said his plan could unlock more than one trillion rand ($ 60 billion) in investment and create more than 800,000 jobs over the next four years.
He said modeling by the National Treasury showed that annual economic growth could rise to an average of around 3 percent over the next ten years.
“Despite these important interventions, the damage the pandemic caused to an already weak economy, employment, livelihood, public finances and state-owned companies was colossal,” Ramaphosa said in a joint session of parliament.
South Africa was in recession before experiencing its first coronavirus infection in March. One of the world’s toughest lockdowns and a global decline in export demand caused GDP to decline more than 17 percent annually in the April-June quarter. when more than two million jobs were lost.
Ramaphosa’s government has been in talks with business and union leaders for months to find a way to recovery.
He said Thursday that an infrastructure building program will focus on schools, water, sanitation and residential buildings, as well as ports, roads and railways.
Other parts of the plan include expanding power generation capacity to ensure reliable supplies, local production targets in sectors such as agro-processing, healthcare and industrial equipment, and implementing reforms to remove regulatory bottlenecks, including for miners.
A COVID-19 relief grant has been extended for an additional three months, and Rand 100 billion has been allocated to job creation initiatives over the next three years, Ramaphosa added.
The president’s speech comes two weeks before Finance Minister Tito Mboweni sets out spending plans with a medium-term budget.
Looking forward to Mboweni’s speech, Ramaphosa said the country cannot sustain its current national debt as rising borrowing costs divert the resources needed for economic and social development.