South African President Cyril Ramaphosa and Chinese President Xi Jinping have agreed that China will invest more than R370-billion in South Africa. (Andy Wong/POOL via Reuters)
President Cyril Ramaphosa wants to turn South Africa into a “construction site” as part of his ambitious plan to drag the country out of its current economic quagmire and create much-needed jobs, government insiders told the Mail & Guardian.
He plans to jolt the economy back to life with labour-intensive projects that will create jobs for ordinary South Africans and drive consumer spending in the country.
Last month, the M&G reported that one of the many proposals under the government’s consideration was to increase social grants in order to stimulate consumer spending.
However, during his announcement on the framework of government’s economic stimulus packages last week, Ramaphosa singled out infrastructure as a key target to drive economic activity.
Ramaphosa announced plans to establish a South Africa Infrastructure Fund, to be funded partly by the fiscus and private investors.
A senior government leader, who did not want to be named, told the M&G this week that whatever monies were poured into the fund by private stakeholders would be in the form of investments and not loans.
“The president now is pushing to make South Africa a construction site. He’s working with a lot of funding institutions to build an infrastructure fund. They’re putting their monies into that infrastructure fund. It’s not a loan to government,” the senior government leader said.
Other measures that were being introduced to stimulate the economy were:
- Relaxing South Africa’s visa laws for travelling minors to boost tourism;
- Offering policy certainty in the mining sector by halting further action on the Mineral and Petroleum Resources Development Amendment Bill; and
- Releasing a radio-frequency spectrum that government hoped would lead to lower data costs to aid the ICT sector. The senior government leader said implementation and accountability were crucial areas in which Ramaphosa was demanding compliance now that he had announced the stimulus plan.
“The problem we [had in the past was] implementation. And the president is trying to clean up this poor implementation thing. A lot of things we committed to in February [for instance], we didn’t implement them and we are trying to sort out those things now,” the leader said.
Despite the heated contest between Ramaphosa and Minister in the Presidency Nkosazana Dlamini-Zuma ahead of the ANC’s 2017 Nasrec conference, government insiders have lauded the working relationship between the two. The government official said the strategic move to place Dlamini-Zuma, known to be firm in her decision-making, in charge of the monitoring and evaluation department would ensure all leaders were held accountable for spending in their departments.
“Forget about CR17 and NDZ [lobby groups]. To put Nkosazana at monitoring and evaluation, I think Cyril was very smart to have it run by Nkosazana. If it’s Nkosazana there, people are going to be made to account.”
Next month,government will host a jobs and investment conference at which the government leader said more “big announcements” would be made regarding investments from other countries.
The National Economic Development and Labour Council will hosts its jobs summit next week at which business, labour and civil society are expected to come up with strategies to create more jobs.
China has already committed to spending more than R370-billion in investments and loans in South Africa. In addition, Saudi Arabia has pledged an investment of more than R130-billion and the United Kingdom has promised R850-million.
There are some concerns about the conditions set by investors, particularly China, in exchange for their financing.
But the official said government would have to ensure it stuck to a solid plan to demonstrate certainty to investors on how the money would be used.
“The most important thing is that there has never been a problem with money coming in. The problem is for the past 10 years we didn’t know what we were doing with money. What investors want now is a clear programme,” the senior government leader said