WRAP | Ramaphosa extends special Covid-19 grant, plans 800 000 new job opportunities

Ramaphosa extends special social grant, announces four broad policy interventions to boost growth 

President Cyril Ramaphosa has said the reconstruction and recovery plan be presented to a joint sitting of Parliament on Thursday can boost SA's average annual economic growth to 3% a year for the next decade via four broad policy interventions. 

South Africa has failed to grow above 2% for the last five years, and is facing one of the biggest ever contractions in 2020. 

The four intervention are a massive rollout of infrastructure, the rapid expand of energy generation, an employment stimulus to create jobs - especially in the govt sector, and a drive for industrial growth linked to a localisation police and export help. 

But the biggest immediate change announced by Ramaphosa is that the Special COVID-19 Grant will be extended by a further 3 months.

The president said it would not be extended after this. 

Finance Minister Tito Mboweni may give more information about the cost of these plans in his medium-term budget policy statement in two weeks time. 

The president is now nearing the end of his address. 

"We shall not rest until we have built a new economy based on fairness, justice and equality.  This is the task of our generation: to renew, to repair, to rebuild."

The president is given a short round of applause. With that the sitting is adjourned. 

"Our country is emerging from one of the most difficult periods in living memory," says the president. 

"South Africans have suffered and have made great sacrifices, sharing in this hardship with people all over the world.   But as South Africans, we have a deep reservoir of resilience to draw upon."

Ramaphosa notes that criminal elements have "taken to the illegal occupation of construction sites and soliciting protection money from businesses'.  

"To combat these practices, a Joint Rapid Response Team at a national and provincial level will respond to the problem of violent disruptions at construction sites and other business activities."

The president says that the state will be granting third-party access to the core rail network and the revitalisation of branch lines, without providing further details. 

Meanwhile, he again promises that high-frequency spectrum will be released by March 2021.

The president says that, to support tourism, the country will shortly be publishing an expanded list of countries from where resumption of international travel will be permitted, which will be supported by targeted marketing in partnership with the private sector.  

"We urge South African to continue to explore their country in support of the tourism recovery as one of the hard hit sectors by the Covid-19 pandemic."

Ramaphosa says a vital part of growing SA's industrialisation effort are sectoral masterplans.

"There are currently masterplans in the automotive, clothing and textile, poultry and sugar sectors.

"We are now working to finalise masterplans in the digital economy, forestry, agriculture and agro-processing, creative industries, aerospace and defence, renewable energy, steel and metal fabrication and furniture" he says. 

Ramaphosa says the reindustrialisation will be accompanied by a strict localisation policy, including for steel products. 

"Together with business and labour, we will soon be publishing localisation targets for goods in areas like agro-processing, health care, basic consumer goods, industrial equipment, construction materials and transport rolling stock.  

"We will enforce government policies to ensure that all public infrastructure projects use locally-made materials, including steel products, cement, bricks and other components. "

This festive season there will be a missive "buy local" campaign, he adds. 

The president says there are "huge opportunities that we can seize through effective partnerships, targeted deployment of resources and the right policies".  

"South Africa currently imports around R1.1 trillion of goods, excluding oil, each year. If we were to manufacture just 10% of these goods locally, it is estimated that we could add 2 percentage points to our annual GDP."

Ramaphosa says the forth leg of the recovery plan is a drive for industrial growth.  

"This is in the context of a steady decline of our manufacturing base over many years. To place our economy on a new trajectory, we are going to support a massive growth in local production and make South African exports much more competitive," he says. 

The president says govt will extend the Special Covid-19 Grant by a further 3 months.  

"This will maintain a temporary expansion of social protection and allow the labour market sufficient time to recover," he stated, to applause.  

He says it will not be extended beyond the next three months. He also notes that discussions are underway around a basic income grant.  

The president adds that the state will roll out direct support for livelihoods and the protection of jobs in vulnerable sectors.  

"Support is being provided to more than 100 000 early childhood development practitioners and to 75 000 small-scale farmers whose production was disrupted by the pandemic.  

"Grant-making programmes are being expanded in the creative, cultural and sports sector, and funding has been allocated to protect jobs in cultural institutions such as museums and theatres.  

"More than 40 000 vulnerable teaching posts are being secured in schools which have lost income from fees."

"We are going to expand our natural resource management programmes such as Working on Fire and Working for Water," says the president. 

"We are going to create 300 000 opportunities for young people to be engaged as education and school assistants at schools throughout the country, to help teachers with basic and routine work so that more time is spent on teaching and enabling learners to catch up from time lost because of Covid.   

He adds that 60 000 jobs will be created for labour-intensive maintenance and construction of municipal infrastructure and rural roads.  

Cities will also boost employment. Recruitment will be fair and transparent, he says. 

The president says that over 800 000 employment opportunities created in the months ahead.  

"The employment stimulus is focused on those interventions that can be rolled out most quickly and have the greatest impact on economic recovery."

Public employment will be boosted, he says. "At the heart of the employment stimulus is a new, innovative approach to public employment which harnesses the energies and capabilities of the wider society."

The state's third key intervention is an employment stimulus scheme to create jobs and support livelihoods.  

"Large-scale job interventions driven by the state and social partners have proven effective in many countries that have faced devastation from wars and other crises," says the president.    

"We have committed R100 billion over the next three years to create jobs through public and social employment as the labour market recovers.   This starts now, with over 800 000 employment opportunities created in the months ahead."

Ramaphosa adds that "in the immediate term", agreements will be finalised with Independent Power Producers to connect over 2 000 MW of additional capacity from existing projects by June 2021.  

"The Risk Mitigation Power Procurement Programme will unlock a further 2,000 MW of emergency supply within twelve months," he says, adding that the process to implement bid window 5 of the renewable energy programme has begun.  

The president notes that a "long-term solution to Eskom’s debt burden will be finalised", but does not provide further details. 

The president says the second major leg of the plan is to expand energy generation capacity.  

"We are accelerating the implementation of the Integrated Resource Plan to provide a substantial increase in the contribution of renewable energy sources, battery storage and gas technology.  

"This should bring around 11 800 MW of new generation capacity into the system by 2022. More than half of this energy will be generated from renewable sources."

"The Infrastructure Fund will provide R100 billion in catalytic finance over the next decade, leveraging as much as R1 trillion in new investment for strategic infrastructure projects," he says. 

Some of the initial projects include Matlosana N2 in North West, Lufhereng in Gauteng, Greater Cornubia in KwaZulu-Natal and Vista Park in Free State.

"In total, we have gazetted 18 housing projects to the value of R130 billion, which together will produce more than 190 000 housing units.  

"Transport projects currently under construction include the N1 Polokwane and N1 Musina with a total value of R1.3 billion.  

The president says that, within the next six months, the state will embark on the modernisation and refurbishment the commuter rail network, include the Mabopane Line in Tshwane and the Central Line in Cape Town. 

Ramaphosa says the first leg of the plan will be "massive rollout of infrastructure throughout the country".  

"Infrastructure has immense potential for stimulate investment and growth, to develop other economic sectors and create sustainable employment both directly and indirectly.   We have developed a robust pipeline of projects that will completely transform the landscape of our cities, towns and rural areas."

"Our infrastructure build programme will focus on social infrastructure such as schools, water, sanitation and housing for the benefit of our people. We will focus on critical network infrastructure such as ports, roads and rail that are key to our economy’s competitiveness," he says. 

Ramaphosa says that, based on economic modelling, the plan will boost SA's average economic growth to about 3% over the next decade. 

"Our recovery will be propelled by swift reforms to unleash the potential of the economy, and supported by an efficient state that is committed to clean governance."

It will be inclusive and transformation, he says. 

Ramaphosa says the damage to the economy has been "colossal", with over 2 million people losing their jobs and a 16.4% q/q contraction in GDP. 

The president says the state is working with banks to expand the R200 billion loan-guarantee scheme to businesses. 

"I am certain the banks will come back with a refined scheme, together with Treasury," he says. 

The expansion of social protection has kept 5 million people above food- poverty line over past six months, he says, as he lists relief measures, including wage support and grants that were implemented at the start of the pandemic. 

Ramaphosa says poverty and inequality have continued to deepen, threatening many South Africans with hunger from a sudden loss in income. 

He notes the state has already announced  R500 billion relief package, the biggest on the African continent. 

"It is far too soon to declare a victory over this virus," says the president, notes that the WHO has warned of second waves after 4 to 8 weeks of low transmission. 

"High vigilance," is needed, to reduce new cases to less than 1000 cases per day. 

Ramaphosa says the pandemic has caused "great hardship and suffering," notes that over 18 000 South Africans have died. 

Ramaphosa notes he is presenting the plan seven months after SA declared a national state of disaster. 

"The reality we must confront is that the pandemic will not be over soon". 

The president says the plan will also accelerate economic reforms, "fight crime and corruption" and improve the state's capability. 

These are all linked to the National Development Plan, he says. 

The president says the joint sitting will hear his plan for the reconstruction and recovery of the economy "following the devastation caused by Covid-19". 

It must be an "inclusive and new economy', he says. 

The priority is to create jobs via infrastructure and mass employment, while reindustrializing. 

President Cyril Ramaphosa will on Thursday afternoon address a joint sitting of both houses of Parliament to present an economic recovery plan for South Africa. 

In the second quarter of the year, South Africa shed 2.2 million jobs while GDP contracted by a record 16.4%. Business confidence and manufacturing production also plunged, although both are starting to show some improvements. 

Ramaphosa will be basing his plan on consultations with Cabinet and various advisory bodies and panels. 

Ahead of President release, the SA Communist Party called on Ramaphosa to speak to the root of the matter.

“To be meaningful, the address should decisively tackle not only the effects, but also the causes of, and the economic and broader social development problems that South Africa faces,” the SCAP said in a statement.

The party called for systemic and structural economic policy change, noting that the Covid-19 pandemic has exposed the country’s worsening unemployment crisis, poverty and inequality.