SA Economic Reconstruction and Recovery Plan
A post-Covid recovery plan for South Africa was revealed by President Cyril Ramaphosa in Parliament on Thursday, 15 October 2020.
SA’s economy is expected to shrink by at least 8% this year, with more than 2 million South Africans losing their jobs in the second quarter. The economy also contracted by 16.4% when compared with the previous quarter. Governments Economic Reconstruction and Recovery Plan, should help to (on average) raise growth to around 3% over the next 10 years.
Ramaphosa said “This economic shock is unprecedented in our country, and it will take an extraordinary effort to recover from it.”
“As even the darkest of clouds has a silver lining, we need to see this moment as a rupture with the past and an opportunity to drive fundamental and lasting change.”
Key points of the plan
- Over R1 trillion in infrastructure investment over the next four years
Here, the president made reference to the modernisation of the commuter rail network, include the Mabopane Line in Tshwane and the Central Line in Cape Town.
“We are promoting greater private sector participation in rail, including through granting third-party access to the core rail network and the revitalisation of branch lines” he said.
Road rehabilitation and maintenance programmes using “labour intensive methods” are also planned.
- More than 800 000 work opportunities created and livelihoods supported through the Presidential Employment stimulus
In the next few months, 300,000 work opportunities will be created for young people to serve as education and school assistants. Ramaphosa says this will 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.
More than 60,000 jobs will be created for labour-intensive maintenance and construction of municipal infrastructure and rural roads. An additional 6,000 community health workers and nursing assistants will be deployed as South Africa proceeds with the implementation of National Health Insurance, Ramaphosa announced.
“Each of these work opportunities is fully funded and ready for implementation,” Ramaphosa said. Other jobs will be created in provincial and local governments “contributing to cleaner, greener and safer public spaces and improved maintenance of facilities”.
- Nearly 14 000MW of new energy generation capacity procured by 2022
The President put forth a deadline of 2022 – for South Africa to achieve sufficient and reliable energy supply. There was not much new information about how this will be achieved. And how Eskom’s R450 billion debt burden will be solved.
The Covid-19 R350 (SRD) Social relief from distress grant extended
The SRD grant was supposed to end at the end of October. There has been widespread calls on many fronts for SRD grant to be increased and made permanent. However, the President said it would be impossible to make the grant permanent but announced that it would be extended (and paid) for another 3 months.
South Africans are undoubtedly in for a rough economic ride ahead. If you feel that you are not coping with your debt and might be over-indebted – fill out a contact form. And one of our expert consultants will be in touch shortly.