SONA 2021: Ramaphosa says positive economic recovery possible
By Zintle Mahlati 27m ago
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Johannesburg – President Cyril Ramaphosa, in his State of the Nation Address, aimed to provide hope that the country’s economic recovery plan is on a promising path as he outlined several achievements.
Ramaphosa dedicated a large part of his speech on Thursday night to the government’s economic recovery plan.
He acknowledged that the country's outlook seemed bleak as the economy shrunk by 6% in the third quarter of 2020. A total of 1.7 million people were jobless in the third quarter of 2020 and the unemployment rate sat at 30.8%.
He said because of the economic relief measures being implemented, a recovery in the unemployment figures was possible.
Ramaphosa said the economic relief package he introduced last year, valued at R500 billion, had provided much needed relief to poor households and struggling businesses. He said 18 million people received additional grant payments and R57 billion, to 4.5 million workers, was paid in wage support as part of the UIF TERS scheme.
“More than R1.3 billion has been provided in support mainly for small- and medium-sized businesses. In addition, over R70 billion in tax relief was extended to businesses in distress. Around R18.9 billion in loans have been approved for 13 000 businesses through the loan guarantee scheme,” Ramaphosa said.
He said as part of the economic recovery plan he announced last year, several commitments had been made regarding an infrastructure programme, increasing local production, employment stimulus and the expansion of energy generation.
Ramaphosa said the government had developed a R340 billion infrastructure investment project pipeline which will be targeted at energy, water, transport and telecommunication.
He said construction had already begun on several programmes.
He boasted about human settlements projects which would see 68 000 homes built in Gauteng. This along with the launch of a smart city in Lanseria – also in Gauteng.
The infrastructure plan will also see R19 billion being invested in rehabilitating the N1, N2 and N3 highways.
“These infrastructure projects will lead to the revival of the construction industry and the creation of much-needed jobs. The R100 billion Infrastructure Fund is now in full operation,” he said.
“This fund will blend resources from the fiscus with financing from the private sector and development institutions.”
Another aspect of the recovery plan was to boost local consumption and production of various products by reducing imports by at least 20% in the next five years.
The president said several production and sectors had been identified and have made commitments towards this goal.
“If we achieve our target, we will significantly expand our productive economy, potentially returning more than R200 billion to the country’s annual output,” he said.
The president said the country remained an attractive destination for investment by local and offshore companies.
The last three investment drives, hosted with an aim of attracting R1.2 trillion in investment pledges in five years, have so far R773 billion.
“Firms have reported that some R183 billion of these investments has already flowed into projects that benefit the South African economy. This shows that our country is still an attractive investment destination for both local and offshore companies,” Ramaphosa said.