President Cyril Ramaphosa unveiled a plan on Friday, to return South Africa’s economy back on track by focusing on massive public works and job-creation.
Following a record gross domestic product (GDP) contraction in the second quarter, Ramaphosa said that his plan will unlock more than 60 billion dollars in investment in the next four years and create more than 800,000 jobs.
In a speech to Parliament, he said, “Despite these vital interventions, however, the damage caused by the pandemic to an already weak economy, to employment, to livelihoods, to public finances and to state owned companies has been colossal.”
Ramaphosa also added that his plan was fiscally responsible, as South Africa is not in a position to sustain the current levels of public debt. “Increased borrowing costs are diverting resources that should be going to economic and social development.”
The National Treasury has backed up Ramaphosa’s plan saying that it could raise annual economic growth to an average of about 3% over the next ten years.
South Africa is Africa’s worst hit nation by the coronavirus pandemic with more than 700,000 infections and 20,000 deaths recorded so far. The country has been in recession since March, as the government enforced one of the world’s strictest lockdowns and global demand for its exports declined.
The GDP fell by more than 17% in the second quarter, and over 2 million jobs were lost.
Ramaphosa’s plan focuses on expanding power generation capacity and building new infrastructure that would spur key sectors of the economy.
Over 8 billion dollars has been set aside for job-creation initiatives in the next three years, and the COVID-19 relief grant has been extended for three more months.
