In his first weekly email newsletter, President Cyril Ramaphosa has stressed that a new growth strategy needs to be adopted to turn the economy around.
Entitled ‘From the Desk of the President’, the email was sent on Monday morning with Ramaphosa writing that: “Each week, I will discuss some of the issues that interest and concern South Africans, and talk about the work we are doing in government to tackle these issues. I hope you will find it useful.”
Much of the first newsletter focused on progress with saving the economy and the need for the growth plan. It follows a blistering presentation by Finance Minister Tito Mboweni at a meeting of the ANC’s national executive committee at the weekend. Mboweni painted a bleak picture of SA's economic prospects, and stuck to his guns in defence of Treasury’s growth plan, which includes suggestions to sell off Eskom's coal-fired power stations and introduce private competition for Transnet.
On Monday, Ramaphosa stressed the need for adopting a growth strategy.
“It is clear that, as a country, we are taking firm action to grow the economy and create jobs. But we need to do more to turn things around. We need to finalise a comprehensive growth strategy that takes all the work being done to another level. I am certain that with the active involvement of all sectors of society, this will be achieved.”
Treasury’s growth plan faces resistance from Cosatu and others.
Government will finalise a clear economic growth strategy within the next few weeks, which will draw “on the many valuable contributions that have been made by South Africans on the discussion paper released by National Treasury”.
Ramaphosa said that the plan will build on efforts to restructure state-owned enterprises and ensure they perform better in meeting the country’s needs. A clear strategy to place Eskom on a sustainable path of recovery is also being finalised.
The president said several parts of the growth strategy are already in place, including a strategy to revitalise SA's industrial sector and the establishment of an Infrastructure Fund.
“All this work is taking place at a time when government’s finances are under great strain, and there is very little room to increase spending or borrowing. This means that we need to spend our limited resources more smartly, get rid of wastage and shift more resources to infrastructure investment.”
Stretched government finances
Ramaphosa said that “almost everyone I meet in the country, whether residents of Lusikisiki or business leaders in Johannesburg, is deeply concerned about the state of the economy and the stubbornly high rates of unemployment.
“These concerns are real. This year, the economy will record growth that is lower than expected (and much lower than what we need). Government finances are stretched about as far as they can go, and several industries are looking at retrenching workers.
In a reference to 'Ramaphoria', he said the “much of the confidence that the country had 20 months ago has dissipated as the reality of the problems we face became clearer”.
While the National Development Plan calls for sustained economic growth of 5% to decrease inequality, the country's projected growth rate for 2019 has been repeatedly downgraded to around 0.6%, less than the 0.8% growth from 2018.
Ramaphosa warned that there was hope “that we would quickly undo the damage that was done over a number of years”, but implementing change takes time.
“Most of the people I speak to recognise that we have made progress in turning our country around. The changes that have taken place in many state-owned enterprises and in bodies like the National Prosecuting Authority, SARS, the police and the State Security Agency give people confidence that we can restore the credibility and integrity of the State. It shows that we are serious about tackling corruption and ending state capture.”
“Despite the difficulties, South Africans from all walks of life are still moved by the spirit of Thuma Mina to become involved in fixing our country,” Ramaphosa said.
Compiled by Helena Wasserman