South Africa is on track concerning the implementation of the country’s broad macroeconomic policies as developed over the past few years and outlined in his State of Nation speech a year ago, according to President Thabo Mbeki.
Addressing MPs in his annual State of the Nation address on Friday, Mbeki said the broad objectives set by the government to growing South Africa’s ”first economy” (or the more developed sector of the country) ”remain the same”.
”We will continue our consultations with our social partners to ensure that our economy continues to steam ahead,” he reassured MPs.
”Our programme for the coming year is premised on the broad objectives to increase investment in the economy, lower the cost of doing business, improve economic inclusion and provide the skills required by the economy. Therefore, the details outlined in May last year, to the extent that the tasks are ongoing, remain an integral part of the programme.”
Infrastructure
Commenting on infrastructure, Mbeki noted that the government has, since May last year, developed strategies and investment plans upward of R180-billion in relation to transport logistics, electricity and water resources.
Transnet has already approved business plans for new investments in the Durban and Cape Town harbours, as well as the construction of a new pipeline between Durban and Johannesburg. As it brings three previously decommissioned power stations into operation, Eskom will add R5,86-billion to the gross domestic product by 2007, with new jobs created peaking during the same year at 36 000.
”We have also taken steps the better to manage administered prices, through the actions of independent regulators as well as through more rigorous monitoring, which will see an administered prices index produced by the official statisticians from the first quarter of this year,” the president noted.
Import parity pricing
Discussions continue with the steel and chemical industries, in particular to reach agreement on the issue of import parity pricing. The government has decided to avoid using legislation or regulations even in the face of these obvious market failures, he added.
”We believe that there is growing consensus among economic role-players with regard to what we are seeking to do,” elaborated Mbeki. ”This is to ensure that, working with especially the producers of inputs that are strategic for economic growth, we find a resolution to this matter in a manner that addresses the interests of both these producers and the downstream industries.”
Telecommunications
”Bold steps have been taken further to liberalise the telecommunications industry. We believe that the unacceptable situation in which some of our fixed-line rates are 10 times those of developed countries will soon become a thing of the past,” said Mbeki.
”We also hope that the delays in setting up the second national operator (SNO), arising from legal processes which are beyond the government’s control, will be resolved in due course, and as soon as possible.”
Many in the telecommunications industry and other sectors were expecting the president to announce the winning SNO bidder, following unconfirmed reports that said the government had, in fact, chosen to allocate the 26% shareholding in Telkom’s rival to India’s Tata Africa.
Capital investment
The government will speed up its capital investment programme, Mbeki pledged, focusing on housing, rural and urban infrastructure, public transport and national logistics system, water and electricity.
In part to facilitate this, urgent steps will be taken to strengthen the public-private partnership mechanism in the government by December 2005, while new steps are also being considered together with international investors to improve foreign capital inflows, Mbeki said.
To improve further the capacity of the government to service the needs of investors, specialist capacity in the Department of Trade and Industry will be beefed up.
Within the next nine months, the government will also make a special effort to finalise sector development strategies and programmes, in the areas of chemicals, business outsourcing and tourism — which will receive additional immediate support; information and communications technology and telecommunications, agro-processing, community and social services; and wood and paper, appliances, the retail and construction industries.
Tax review for small businesses
Before the end of this year, the government will complete the system of exemptions for small, medium and micro enterprises ”with regard to taxes and levies”, Mbeki said.
This will include a review of the regulatory framework ”as it applies” to these businesses, as well as central bargaining and other labour arrangements, enabling these to be factored into the medium-term expenditure cycle.
”The system of tax and levy payments and business registration will be reviewed with the aim of introducing a simpler and streamlined system for all businesses by April next year.
Programmes completed in time
Mbeki said 72% of government programmes have been carried out ”within the broad framework of the time frames we have set ourselves”.
”Overall, our own detailed assessment of the implementation of our programme of action reveals that of the 307 concrete actions contained in the government’s programme, some of which we announced in the last State of the Nation address, 51% of those with specific time frames have been undertaken or are being undertaken within the deadlines we set.
”Twenty-one percent have been or are being undertaken, though there were slight delays in terms of the time frames that we had set ourselves.”
In addition, 28% ”have not been fully carried out, and the reasons behind the delays are such that new deadlines will have to be set for their accomplishment”, said Mbeki.
”In other words, 72% of these programmes are being carried out within the broad framework of the time frames we had set ourselves. Eighty-six percent of the concrete actions that did not have specific time frames are progressing as envisaged, while 14% show some delays that call for urgent attention by government.”
He said: ”Since democracy in 1994, two million housing subsidies had been allocated to the poor, and in December last year South Africa passed the 10-million mark in terms of South Africans who have gained access to potable water since 1994.”
National skills development
The government has approved a new five-year national skills development strategy in which an additional R21,9-billion will be allocated to speed up education, training and skills transfer fro now until 2010, Mbeki revealed.
He said the government has met the target set by the Growth and Development Summit to increase the number of skilled workers, having trained more than 80 000 workers.
However, it is clear that more work will have to be done to raise the skills levels of South Africans, which is why the new national skills development strategy is necessary.
”R21,9-billion over five years will be allocated to fund this strategy, which will include improved cooperation between the Setas [sectoral education and training authorities] on one hand, and the further training and education colleges and the institutions of higher education on the other,” the president said.
Expanded public works programme
At the same time, he noted that the government has begun to put its expanded public works programme into operation. To date, it has spent more than R1,5-billion, created more than 76 000 job opportunities and begun to afford thousands of those enrolled with skills that will stand them in good stead as they leave the programme.
As part of the expanded public works programme, additional programmes will be introduced or further strengthened by April this year, focused on providing training, work experience and temporary income, especially to women and youth, Mbeki added.
These are: the early childhood development programme; increasing the number of community health workers; and the more extensive use of labour-intensive methods of construction targeting housing, schools, clinics, sports facilities, community centres and the services infrastructure.
Crime rates
Mbeki said that in the past financial year, the rates of such crimes as murder, theft of motor vehicles and motorcycles, common robbery, cash-in-transit heists and bank robbery have declined.
”The trend in the past financial year which has seen the rate of such crimes as murder decline by 8%, theft of motor vehicles and motor cycles by 5,4%, common robbery by 5,9%, cash-in-transit heists by 48,7% and bank robberies by 57,5% should continue and in fact improve in subsequent years.
”Yes, there are crimes such as aggravated robbery and child abuse, which show an increase. Yes, the level of crime, especially violent incidents, remains unacceptable. But we are confident of meeting our target to reduce the rate of contact crimes by 7% to 10% per year.
”As planned, the security agencies have set up task teams to identify, apprehend and convict the gang leaders of organised crime and other perpetrators of serious crimes. Of those involved in organised crime, 67 out of 96 identified have been arrested.
”The same deserved fate has befallen 40 out of 42 identified for commercial crimes involving cases above R5-million and other projects valued at R50-million. Sixty-one of the 62 involved in violent crime, including cash-in-transit and other robberies as well as serial murder and serial rape, have been arrested.”
Mbeki said: ”In brief, 168 of the top 200 identified have been apprehended.”
Plan to combat Aids
The government’s comprehensive plan to combat HIV/Aids is currently being implemented ”with greater vigour”, Mbeki said.
He described South Africa’s Aids programme as ”among the best in the world”, combining awareness, treatment and home-based care.
Mbeki has been criticised in the local and international press for not doing enough to combat the spread of the disease in South Africa over the past few years.
Commenting on health care in general, Mbeki noted that broad trends in mortality confirm the need for the government to continue to pay particular attention to the health of the nation.
”Campaigns to reduce non-communicable and communicable diseases as well as non-natural causes of death will continue,” he said, ”through the promotion of healthy lifestyles and increased focus on TB [tuberculosis], Aids, malaria, cholera and other water-borne diseases, and generally increasing the standard of living of the poorest among us.”
Agriculture credit scheme
Business plans for the agricultural credit scheme have been approved and the government ”will ensure that it becomes operational within the next three months”, said Mbeki.
”With the capital of R1-billion already allocated … this scheme forms part of the broader small and micro-credit initiative, to enable those formerly excluded the opportunity to access credit for productive purposes.”
In addition, he said, R100-million has been transferred to provinces for the implementation of the farmer support programme.
”The Apex fund, the launch of which was delayed, will also become operational in this period. The Bill on cooperatives has been submitted to Parliament for finalisation.”
The Apex fund is aimed at providing small loans to individuals and small businesses.
Deputy Minister of Trade and Industry Minister Lindiwe Hendricks said previously that the fund will facilitate loans of up to R10 000 and provide microfinance services such as micro credit, savings and advice.
Social programme delivery
The government will intensify its efforts to deliver the social sector programme goals it outlined in 2004, such as the provision of clean running water to all households by 2008, decent and safe sanitation by 2010 and electricity for all by 2012, Mbeki pledged.
Promising to speed up delivery of social service improvements in the years ahead, Mbeki did acknowledge, however, that there have been some delays.
”Further effort will be put into clearing the logjams,” he said. ”With regard to the provision of safe classrooms, for instance, we had committed ourselves in 2002 to ensure that within three years, no child studied under a tree.
”However, our schools infrastructure programme will not be realised even within the set time frame. The same applies to the commitment we made last year that all schools would have potable water and sanitation by the end of this financial year.”
Mbeki also revealed that the government will this year launch the National Social Security Agency and implement systematic plans against corruption, including with regard to definitions of disability and allocations of the foster care grant. — I-Net Bridge