The more business owners emigrate, the worse the consequences for job creation, says Solly Moeng.
President Cyril Ramaphosa has announced a package of economic reforms and spending plans on Friday morning in an effort to boost South Africa's sluggish economy.
* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER
President Cyril Ramaphosa has announced a package of economic reforms and spending plans on Friday morning in an effort to boost South Africa's sluggish economy.
Ramaphosa said the stimulus and recovery plan would be "implemented immediately". Its goals are to ignite economic activity, restore investor confidence, prevent further job losses and create new jobs.
He also said the plan aims to address "urgent challenges" affecting vulnerable South Africans. Acknowledging that the country had "limited fiscal space to increase spending or borrowing" Ramaphosa said the central element of the stimulus would be a "reprioritisation" of spending between government departments.
Continue reading below
President Cyril Ramaphosa's newly-announced economic stimulus package has a specific focus on implementation, according to Public Enterprise Minister Pravin Gordhan.
Speaking to the SABC following the Ramaphosa's announcement, Gordhan said the plan went beyond the introduction of new policy to focus on how the policy would be successfully implemented.
"We often get criticised for having nice policies, but not being able to implement. That is an important ‘new start’ to the way we do things in government."
Reaction to the stimulus package has started to come in.
Jabu Mabuza, co-convenor of the CEO Initiative and Eskom chairperson. (Speaking on behalf of the CEO initiative)
“The stimulus and recovery plan demonstrate the political will to make the necessary, tangible reforms that our economy needs in order to perform at its optimal level and deliver change in the lives of the most vulnerable in our society.
"We are particularly encouraged by the undertaking from the president and Minister of Finance that this stimulus will be implemented by reallocating existing resources, as well as embracing other forms of financing through partnerships, rather than adding to the sovereign debt level.”
Ivan Fredericks, the general manager of trade union the Public Servants Association
“The PSA acknowledges the announcement that government will fill 2 200 critical medical post immediately. This is a great step in the right direction considering the state of health services in the country.
"The shortage of personnel in the public service has adversely compromised service delivery especially in health, education and policing. The President should consider looking to fill vacancies in the education and policing as a matter of urgency,” said Fredericks.
The Economic Freedom Fighters
"Ramaphosa has announced nothing new, but an attempt to repackage old neoliberal economic plans that have proven futile; they have failed to grow the economy and create sustainable jobs.
"The stimulus package has nothing to do with the overall structural changes of the economy. The promise of radical economic transformation which he made noises about prior to being elected President has been compromised at the table of cosmetic changes to an economy whose essence is the marginalisation of the black majority from the country's wealth."
Annabel Bishop of Investec
"South Africa is classified as a middle income economy, but the citizens themselves do not, by and large, fall into the middle income bracket, enduring low income levels and poverty instead which South Arica’s latest growth plan, the ERSP, actually could have a real likelihood of changing.
"This is due to the tight financial and performance controls that will likely be driven by Nene, Ramaphosa and Gordhan, giving the private sector and markets confidence on the avoidance of leakages of monies from the system.
"With the President’s strong business acumen, tight financial controls, labour participation and support, substantial private sector investment involvement and successful financial vehicles SA has a chance of lifting GDP growth to 5% in the medium term, and out of recession in the second half of this year, and into economic growth of around 2.0% next year."
Western Cape MEC of Economic Opportunities Alan Winde
Winde has welcomed the announcement of a friendlier visa regime. The Western Cape is one of the country's tourist hotspots.
“The tightening of the visa regime in 2014 had severe consequences for our tourism sector, a major income provider for residents in our region. The hospitality sector reported widespread cancellations, with travel from some markets, such as China, being particularly constrained.
Dr Frans Cronje, the CEO of the Institute of Race Relations
“The success or otherwise of any policy framework or stimulus package must be the extent to which it will allow South Africa to compete in time with rates of growth similar to those of comparable emerging markets - any lesser standard sells South Africa short.
“What was announced today is vacuous in the sense that it fails to address the deeper policy underpinnings of South Africa’s sluggish economic growth. There was nothing fundamental on labour market reform, nothing sound on empowerment policy reform, no moves of any significance on education policy, and far from adequate assurances on property rights.”
"The Congress of the People welcomes the President’s announcement of government’s recovery and stimulus plan.
"However, what came out clear is that this plan was cobbled together not from a position of strength but from a position of weakness in the face of self-made constraints - including that of limited fiscal space.Much of the reforms announced refer to ‘own goals’ scored by the poor and corrupted governance of the state by the ANC."
David Maynier, DA finance spokesperson
"The 'stimulus and recovery plan' is aimed at speeding up the implementation of existing economic policies, rather than introducing new economic policies, such as exempting small businesses employing fewer than 250 employees from complying with restrictive labour legislation, other than the basic conditions of employment, in South Africa
"The fact is that the R400 billion that will be allocated to the infrastructure fund is also not “new money” and has already been allocated to expenditure on public infrastructure in the existing budget over the medium term between 2018/19 and 2020/21."
The Cape Chamber of Commerce and Industry
The chamber has welcomed the announcement by President Cyril Ramaphosa that visa regulations for tourists are to be revised to ease their entry into South Africa.
“This will make a big difference in the Western Cape which has invested heavily in its thriving tourist industry,” said Janine Myburgh, Chamber's president.
“What the visa changes show is that ways can be found to boost the economy without spending money. Sometimes all the government has to do is remove the hurdles and growth will take place.”
President Ramaphosa has announced the names of his 10-person advisory panel on land reform.
“[The] advisory panel on land reform that will support the Inter-Ministerial Committee on Land Reform chaired by Deputy President David Mabuza,” he said.
The members of the panel are
*Dr Vuyokazi (Vuyo) Mahlati, a member of the National Planning Commission and president of the African Farmers Association of South Africa. (Chairperson)
*Professor Ruth Hall, a researcher and professor at the University of the Western Cape’s Institute for Poverty, Land and Agrarian Studies.
*Professor Mohammed Karaan, Professor in Agricultural Economics at Stellenbosch University.
*Advocate Tembeka Ngcukaitobi, whom according to the presidency is a “a lawyer, public speaker and author whose current work for the Legal Resources Centre and Johannesburg Bar spans public law, labour law and competition.”
*Bulelwa Mabasa, an attorney with expertise in land restitution and land reform.
*Dr Thandi Ngcobo, CEO and founder of the Dr J L Dube Institute of the University of KwaZulu-Natal.
*Agricultural economist Wandile Sihlobo, head of research at the Agricultural Business Chamber of South Africa and an independent agricultural economic advisor to the Afgrain Food Group.
*Daniel Kriek, a Free State farmer and President of AgriSA.
*Thato Moagi, a young emerging farmer and entrepreneur.
*Nick Serfontein, chairperson of the Sernick Group and 2016 Free State Farmer of the Year and Mentor of the Year.
The Ramaphosa Plan: Doing more with the little he’s got
"This comes straight from him," one of president Cyril Ramaphosa’s advisors said after he delivered his much-awaited speech on economic recovery on Friday.
The advisor, bleary-eyed but obviously relieved that the statement explaining government’s economic stimulus plan had finally been delivered, said the head of state was intimately involved in the finalisation of the speech. His team of speech writers were, in fact, busy finalising the text at 04:00, six hours before he was due to deliver it.
"We had to make some adjustments…in one instance I had to say to the president we’re going to have to change something, we can’t put it like he wanted it to!"
Read News24 journalist Pieter Du Toit's recap of the key points of Ramaphosa's stimulus plan below.
One of the key economic reforms mentioned in the president's speech was the country's visa regime. The president focused on amendments that will be made to regulations governing the travel of minors to South Africa and the list of countries requiring visas to enter South Africa.
He also mentioned an e-visa pilot project that will be implemented, and said visa requirements for highly skilled foreigners will also be revised.
"These measures have the potential to boost tourism and make business travel a lot more conducive. Tourism continues to be a great job creator and through these measures we are confident that many more tourists will visit South Africa," says Ramaphosa.
Read the full text of President Ramaphosa's economic recovery plan statement below .
One of the most interesting announcements by Ramaphosa was of a 10-person advisory panel on land reform.
Details of the panel's members, its mandate, and how its would work with other govt bodies are set to be made public in due course.
Ramaphosa said: "As part of the work to develop agriculture and ensure effective land reform, I have appointed an advisory panel on land reform that will guide the Inter-Ministerial Committee on Land Reform chaired by Deputy President David Mabuza.
"The 10-person panel is to advise government on the implementation of a fair and equitable land reform process that redresses the injustices of the past, increases agricultural output, promotes economic growth and protects food security. Further details of the mandate and composition of the panel will be made available in a separate statement."
The rand has firmed to under R14.20/$ after Ramaphosa finished his address.
Ramaphosa has finished his address. Ramaphosa has said that "implementation is immediate" and more details will be shared with the public.
Ramaphosa is asked about funding for the infrastructure fund. He earlier said that the fiscus would commit R400bn to the fund over the medium term, and would seek external funding.
It is unclear how much, if any, of this R400bn will be taken from already-budgeted spending for infrastructure projects.
Ramaphosa says that the fund would be a blended-fund, with equity, debt, and bonds.
He mentions that pension funds may want to invest as long-term investors, but that the govt is not looking to the IMF.
Me mentions that India has instituted a similar fund "to good effect".
He says an "execution and implementation unit" will make sure that projects and delivered within budget and on time.
Ramaphosa is asked where the money for the reprioritisation will be coming form. He says Finance Minister Nhlanhla Nene will answer the question.
Nene talks of "trade-offs" and under-performing programmes, but says the announcements will be officially made in his mini budget, which he will present to Parliament on October 24.
Nene says planning is at an advanced stage.
Ramaphosa: if we pull together we will be able to move our country in the right direction of creating jobs" @Fin24 @TeamNews24 #StimulusPackage— SKKhumalo (@SKKhumalo) September 21, 2018
Ramaphosa: if we pull together we will be able to move our country in the right direction of creating jobs" @Fin24 @TeamNews24 #StimulusPackage
Ramaphosa says labour and business have pledged to support the plan.
"We are certain that the measures will ... have an impact," he says. He notes that govt is also planning a Jobs Summit and a major Investment Conference at the end of October.
"As South Africans we have confronted challenges that are far greater than the challenges we are confronting today," he says.
The president says SA will be launching a "mega" infrastructure fund.
"It will reduce the current fragmentation of infrastructure spend," he says. The fiscus will contribute more than R400bn over the medium term expenditure framework period toward the fund.
He says this will be used to leverage further investment.
Ramaphosa says the govt has limited fiscal space to increase borrowing. "We do not have fiscal space to ... go and borrow in a big way'.
He says that, as such, the state has to reprioritise spending within the current fiscal framework.
Spending will be reprioritised to agriculture, he says.
Interventions include support measures for black commercial farmers to increase their entries into food value chains.
He says that focus will be placed on high value crops for expert.
He has also appointed a 10-person advisory panel on land reform. "They will advise govt on the implementation of a fair and equitable land reform process'.
The names will be made public in a separate statement.
The state will also work to revitalise the economies of townships, he says.
More funding will also go to sanitation facilities at schools. The goal is to complete 1 100 sanitation projects.
Ramaphosa says the govt has received tremendous support from the private sector around sanitation in schools.
The Minister of Health will immediately fill 2 200 critical medical posts, he says.
Ramaphosa says the economic stimulus and recover plan will include financial and non-financial measures to ignite recovery, restore investor confidence and prevent job losses.
He says there will be five measures in total.
Packed briefing room at the Union Buildings, waiting for the president to announce his plans for an economic kickstart. @TeamNews24 pic.twitter.com/QB3ZZufU69— Pieter Du Toit (@PieterDuToit) September 21, 2018
Packed briefing room at the Union Buildings, waiting for the president to announce his plans for an economic kickstart. @TeamNews24 pic.twitter.com/QB3ZZufU69
Investors are waiting to see what Ramaphosa says about the revised Mining Charter, which has been approved by Cabinet.
The finalised text of the Cabinet-approved version of the charter has not yet been made public.
“We’re by no means expecting miracles as the government has effectively reprioritised existing funding to strategically important sectors to alleviate unemployment and accelerate productivity growth. But, it’s a step in the right direction,” said RMB's head of markets research Nema Ramkhelawan-Bhana, in a note to clients on Thursday morning.
“The president has stated that the measures would ‘secure confidence in sectors affected by regulatory uncertainty’ – which we can only take to mean that there will be pronouncements on the much-anticipated mining charter, which was approved by Cabinet on Wednesday."
The rand, which gained 2% against the dollar on Thursday, is at R14.29/$ before Ramaphosa begins his address.
The president is set to begin talking any minute now. He is speaking from the media briefing room at the Union Buildings.
Watch the live stream of his announcement via the SABC's YouTube channel at the link below.
Dozens of Journalists waiting to hear President Cyril Ramaphosa deliver the much anticipated economic stimulus package #StimulusPackage pic.twitter.com/bUttO7smbg— SKKhumalo (@SKKhumalo) September 21, 2018
Dozens of Journalists waiting to hear President Cyril Ramaphosa deliver the much anticipated economic stimulus package #StimulusPackage pic.twitter.com/bUttO7smbg
Read the take of Professor Jannie Rossouw, head of Wits University's School of Economic and Business Sciences, about what Ramaphosa should and may say.
President Cyril Ramaphosa will unveil an economic stimulus package on Friday morning at 10:00 that he hopes will lift South Africa's sluggish economic growth rates and create jobs.
Concrete plans for an economic stimulus package were announced by Ramaphosa, in his capacity as ANC President, in late July after an NEC lekgotla. Earlier that month Stats SA had announced the economy had shrunk by 2.2% in the first quarter of the year, later revised downward to -2.6%.
SA officially entered its first technical recession since 2009 in September, when GDP growth for the second quarter decreased by 0.7%.This, in turn, pushed growth projections down.
The Reserve Bank on Thursday again revised down its growth projection for 2018 from 1.2% to just 0.7%. While the content of Ramaphosa's stimulus package is unknown, government officials have over the past few weeks flagged some sectors as fundamental to its economic recovery plan. These include tourism, mining and agriculture.
We have you covered.
There's an app for that
Tranquil and completely off-the-grid with not a soul for miles.
Here's how to cope
90 'Day Fiancé' follows several newly engaged couples.
Cape Town's art rhinos have two messages to convey this week.
We find out more.
Cape TownTumaini ConsultingR460 000.00 - R600 000.00 Per Year
Western CapeWork In China R20 000.00 - R45 000.00 Per Month
Western CapeTechnology Specific cc t/a MVCR10 450.00 Per Month
R 3 700 000
R 4 500 000
R 2 650 000
We subscribe to the Press Code.
You choose what you want
News24 on Android
Get the latest from News24 on your Android device.
Terms and Conditions
24.com Terms and Conditions - Updated April 2012
Creating your profile will enable you to submit photos and stories to get published on News24.
This username must be unique, cannot be edited and will be used in the URL to your profile page across the entire 24.com network.