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Mixed reactions to Ramaphosa's recovery plan

16 Oct 2020

Although President Cyril Ramaphosa's Reconstruction and Recovery Plan addressed all the talking points in steering the country back to desirable growth levels in the aftermath of the coronavirus pandemic, it fell short on tangible frameworks and deadlines.

The plan is based on four pillars

The rollout of an infrastructure development plan

Steps to ensure a reliable energy supply within two years

A jobs stimulus programme

The industrialisation of the economy

Commentary

"While there are positive features to the latest economic reconstruction and Recovery Plan, it needed to say much more about implementation processes and timelines," says North West University Business School's economist, Professor Raymond Parsons.

"There were some positive features to the key four-point plan outlined by the president to address SA’s huge post-Covid-19 socioeconomic challenges. There was recognition by Ramaphosa about the urgency required in addressing the economic crisis, the imperative need to promote job-rich growth, to steadily narrow down the priorities to make them more manageable, and to build business confidence in the period ahead.

But is not a bold reform plan and there was insufficient emphasis on implementation and deliverables.

Parsons says that given the previous failures in delivery and the extraordinary economic times in which SA finds itself, Ramaphosa should have had much more to say about how policies and projects are to be handled differently and to guarantee accountability, with the biggest risk still being the tremendous problems with state capacity. The plan’s ultimate impact on SA’s economic performance also depends on how the Medium Term Budget Policy Statement on October 28 will finance SA’s ability to break out of its ‘low growth trap’ without falling into a ‘debt trap’.

Meanwhile, Stanford Mazhindu, spokesperson of the trade union UASA, says government's track record makes it difficult to accept that the plan will be able to turn the economy around.

"Job creation was the centre of the presentation with the plan promising to create 800,000 job opportunities through major infrastructure development projects. We have heard these promises before the coronavirus pandemic, summits were held to boost the economy and create jobs, and yet they did not yield the expected results.

"Corruption and cadre deployment stands in the way of government’s implementation. Unless there is a firm commitment from the government to root out corruption and revamp the tender issuing process, the infrastructure development plan might not succeed," he says.