Earlier today, an excited and upbeat President Cyril Ramaphosa announced the government’s much-vaunted economic stimulus plan at the Union Buildings in Pretoria on Friday.
Here is what you need to know:
* There is no big number to the plan and it is difficult to determine exactly how much money the state will pump into the economy in an effort to jump-start growth. The plan rather centres around the reprioritisation of existing budgets.
* R50bn, however, is a one hard number mentioned the the president. This is the amount in the existing budget, presented to Parliament in February by then-finance minister Malusi Gigaba, which will be shifted around in this financial year.
* R400bn is another. That is the amount which will be reprioritised in the existing three-year budget cycle and spent on investment in infrastructure.
* The plan centres around five pillars: policy reform which will enhance economic growth, the reprioritisation of public spending, an infrastructure “mega fund”, tackling education and health matters, and investment in municipal infrastructure.
* Some of policy amendments which have constrained growth and which the president announced will be changed include the country’s visa regime, not promulgating the controversial Minerals and Petroleum Resources Development Act currently before Parliament, and finality on the revised Mining Charter which has been adopted by Parliament.
* Agriculture is identified as a major driver of economic recovery and will receive priority funding. The Land Bank will play a major role, and an 10-person advisory panel on land reform has been set up to help galvanise the sector and to ensure sustainability, growth and food security.
Ramaphosa clearly realises the country cannot afford to borrow and repeated several times that “fiscal space is constrained”. Therefore the presidency will play a central role in the timely delivery and completion of infrastructure projects. The “mega fund” will be administered from the presidency by an Infrastructure Execution Team which will consist of public and private sector representatives.
The private sector is expected to be a major partner in government’s efforts to boost growth. Ramaphosa said there was extensive consultation with representatives from the sector, as well as labour bodies. Experts like engineers and executives will be recruited to serve on various advisory bodies.