Sipho Pityana: SA must avoid a third crisis that would push us to the IMF

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Sipho Pityana during the Presidential Jobs Summit at the Gallagher Convention Centre on October 04, 2018 in Midrand (Gallo Images / Netwerk24 / Felix Dlangamandla)
Sipho Pityana during the Presidential Jobs Summit at the Gallagher Convention Centre on October 04, 2018 in Midrand (Gallo Images / Netwerk24 / Felix Dlangamandla)
  • Busines Unity South Africa President Sipho Pityana says key to the economic recovery plan is implementation.
  • Pityana said that business, government and labour had agreed on most critical areas that need to be addressed for the country's recovery.
  • He warned that social partners must come to the party to avoid a third crisis that would force the country to the IMF.

The moment Cabinet signs off on the economic recovery plan, social partners need to focus on its implementation, said Business Unity South Africa President Sipho Pityana.

Pityana on Friday addressed the 2020 annual meeting of the country's apex business organisation.

"It is time to bite the bullet. We can no longer afford stalled policy reform as it erodes the economy's potential growth and its global competitiveness," Pityana said.

He explained that the lack of economic direction in the past precipitated one crisis, and Covid-19 precipitated a second crisis.

'Third, terminal crisis'

"All of us government, business, labour and community need to make the most of what we have learnt to ensure we do not enter a third, terminal crisis in which the wheels come completely off the economy, we are indebted to the IMF forever, with all the conditionality that comes with such a scenario," he said.

His remarks come after the National Economic Development and Labour Council on Tuesday agreed to an economic recovery plan. Labour federation Cosatu has also said there has been "convergence" on most of the plan. Cabinet will finalise the plan over the next few weeks.

Pityana said that there are three critical matters that will have medium and long-term impacts and must be engaged on immediately. They include fundamental structural reform interventions, to enable both global and local investment and achieve inclusive and sustainable growth. Critical interventions to stabilise the fiscal situation, such as managing debt and public expenditure, are also important.

Finally, "hard decisions" on state-owned enterprises (SOE) – this includes optimising efficiencies that are strategically significant, rationalising certain SOEs, considering equity participation where needed, and divesting from SOEs with no prospect for yielding economic or social benefit to the country.

Members of the social compact have also committed to mobilising funding to address Eskom's crisis in a sustainable manner, Fin24 previously reported. Pityana said the commitments to support Eskom would hopefully ensure the issue of power supply would be dealt with as quickly as possible, in a "conclusive and inclusive fashion," he said.

A draft of the plan, seen by Fin24, shows that among the short-term interventions are improving energy security and affordability – by ensuring the operational and financial stabilisation of Eskom, fast tracking the implementation of self-generation projects and ensuring new and affordable generation capacity by accelerating the implementation of the Integrated Resources Plan as well as enabling gas to power programmes.

Another short-term priority is expediting digital migration by March 2021, releasing high demand spectrum and expediting the rollout of broadband and other ICT infrastructure. There is also emphasis placed on localisation, replacing imports as a means of job creation.

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