The Banking Association South Africa (BASA) welcomes President Cyril Ramaphosa’s announcement of an economic recovery and stimulus package for the country. South Africans – business, workers and the unemployed – as well as the international investor community, must be assured that inclusive economic growth is the national priority.
The president’s commitment to the “immediate implementation” of the package of economic measures, is a cause for hope.
The President spoke about “immediate” changes to the visa regime that has hampered the growth of tourism; that he expects that “within the next few weeks” government will initiate a process for the allocation of high-demand radio spectrum to unlock value in the telecommunications sector; and that a “dedicated” Infrastructure Execution team will be created in the office of the president.
Many of the measures announced echo previous initiatives, and it is only the quick and efficient implementation of the proposals – by an effective and responsive public service – that will ensure this stimulus package succeeds where others have failed, and that it delivers on the promise of inclusive economic growth.
The president has put his stamp on this economic stimulus package. We hope he will ensure that those charged with delivering on his promises are held to account. Business, consumer and investor confidence cannot afford more disappointment brought on by empty promises.
Fifty billion rand is a significant investment in job creation and infrastructure. We look forward to the detail of the reprioritisation of government spending, to release funds while demonstrating its continued commitment to fiscal restraint.
But, while R50 billion is a good start, the country needs significantly more stimulus if it is to shake off a decade of economic stagnation and effectively tackle unemployment, poverty and inequality. While South Africa simply does not have the fiscal space to spend or borrow more, an effective clampdown on corruption and wasteful expenditure can release some of the needed resources. Judicial commissions must lead to criminal convictions and the recovery of assets from those who stole from the country.
If South Africa is to find its way out of the present economic quagmire, hard trade-offs will have to be made between the interests of government, business and labour, for the national good – including deciding, quickly, on the future of some state-owned enterprises. Our country’s resources need to be directed to productive infrastructure, rather than keeping failing and unnecessary state-owned enterprises from bankruptcy.
Financial institutions have often indicated their willingness to partner with government in “bankable” infrastructure and other development initiatives. Moves towards reducing uncertainty in mining and agriculture and facilitating new investment into these industries are vital, as policy uncertainty has hindered their ability to create jobs and wealth.
The planned investment in education and health, township economic development and entrepreneurship is important. All South Africans – not only business – must see the benefits of the recovery and stimulus package in better social conditions and inclusive economic growth.
We look forward to receiving the outstanding details of the stimulus and recovery package, the investment and job summits, timetables for implementation, measurements of success and clear lines of responsibility and accountability.