The R372-billion to be spent by the South African government on infrastructure under its Accelerated and Shared Growth Initiative (Asgi) initiative over the next three years will be very closely tracked by both the National Treasury and at Cabinet level, Deputy President Phumzile Mlambo-Ngcuka has pledged.
Mlambo-Ngcuka was addressing the media in Parliament on Monday to provide further details on Asgi as outlined by President Thabo Mbeki in his State of the Nation speech on Friday.
According to Mlambo-Ngcuka, the R372-billion in infrastructure spending announced by Mbeki is not new, but rather has already been provided for in the Treasury’s 2005 Medium-Term Expenditure Framework (MTEF), with various project spending simply being consolidated under the Asgi framework for the three-year budget.
The National Treasury will implement a dedicated mechanism to track the projects included in Asgi to ensure they are completed on time and to avoid roll-overs, the deputy president said. The Cabinet will also be tracking much of what Asgi is doing, and the government will look at additional resources should all the funds run out, she promised.
There will be an additional R4,5-billion budgeted over the new (2006) MTEF period for the Expanded Public Works Programme (EPWP), which will fund an additional 63 000 people working on road maintenance, as well as about 100 000 more people in jobs averaging six months dedicated to road building, and the development of about 1 000 more small black contractors.
Growth
Asgi is aimed at accelerating South Africa’s economic growth to an average of 4,5% between 2005 and 2009, and to 6% between 2010 and 2014, with the ultimate aim of halving poverty and unemployment by 2014.
Regarding spending plans for Asgi’s R372-billion budget, Mlambo-Ngcuka said about 40% of this will be spent by the Department of Public Enterprises, mostly by state electricity authority Eskom (R84-billion covering mostly generation but also transmission, distribution and other) and transport authority Transnet (R47-billion, of which R40-billion will go to harbours, ports, railways and the petroleum pipeline).
The Airports Company South Africa will spend R5,2-billion, including airport improvement and the Dube Trade Port, and R19,7-billion will go to water infrastructure.
The balance will see spending on infrastructure required for the 2010 World Cup — including the 10 stadiums to be used and their environs, as well as access to the stadiums; information and communications infrastructure, including a strategy to grow South Africa’s broadband network rapidly; implementation of a plan to reduce telephony costs more rapidly; the completion of a submarine cable project to provide competitive and reliable international access, especially to Africa and Asia; and the provision of subsidies to encourage the setting up of call centres and labour-intensive business in poor areas.
In addition to these general infrastructure projects, the deputy president said provincial governments have also proposed others that will have major impacts on accelerating and sharing growth. A set of these proposed projects has been selected for finalisation of implementation schemes, the list for which will be released shortly. The projects have been selected for their impact on employment, poverty eradication and economic growth.
Further work on Asgi will incorporate local government initiatives as well, she noted.
Tourism
Plans are afoot to boost the tourism sector’s contribution to gross domestic product (GDP) by 4% by 2014, creating up to 400 000 new jobs, Mlambo-Ngcuka said.
The tourism sector is ready for a new growth phase increasing its contribution to GDP to 12%, Mlambo-Ngcuka said. Key issues to be addressed include marketing, air access, safety, and skills development.
Business process outsourcing (BPO), which entails companies outsourcing functions such as human resources, is another key sector, the deputy president said.
South Africa had attracted about 5 000 BPO jobs from the rest of the world to date, with potential for the creation of another 100 000 direct and indirect jobs by 2009.
Telecommunications costs and regulatory burdens are among the issues to be addressed in boosting this sector, Mlambo-Ngcuka said.
Joint business plans are being developed by the government and private sector for the BPO and tourism sectors, and ”implementation will start in the first half of 2006”, she said. — I-Net Bridge, Sapa