Securing economic growth
Government has stepped up efforts to ensure the country’s economic growth and address unemployment. These efforts include changes made to visa regulations for tourists and highly-skilled professionals, financial support for black farmers and black industrialists and the upgrading and creation of industrial parks.
President Cyril Ramaphosa provided an update on actions to ignite economic activity to the National Assembly during a recent session of Questions for Oral Reply.
He reaffirmed economic growth and job creation as the apex priority of the sixth administration.
The President provided evidence of implementation of the Economic Stimulus and Recovery Plan introduced by government in 2018 to shore up the economy.
A recent intervention in this direction was the designation by the Department of Home Affairs of a number of countries that will receive visa waivers, among them are countries with high tourism potential like Qatar and Saudi Arabia. Qatar has also waived visa requirements for South Africans.
Furthermore, an e-visa system will soon be piloted as part of modernising current systems.
The Department of Home Affairs is working with the Department of Higher Education and Training towards refining a list of critical skills that will inform future regulations.
The President said trade measures had been in place to safeguard key agricultural sectors like the poultry industry, protecting local jobs in the process.
Making it easier to do business in South Africa, the Ports Authority of South Africa reduced tariffs by six percent in late 2018, while also decreasing container and automotive cargo dues.
On agrarian reform, the President said funding to the tune of R3.9 billion had been released to support black commercial farmers through the Land Bank.
To promote greater certainty in the use of land for productive activities, more than 1 400 thirty-year leases have been finalised.
New industrial parks
As part of implementing the stimulus and recovery plan, three new industrial parks have been launched in the 2019 financial year in Ekandustria, Garankuwa and Nkowankowa.
Between September 2018 and July 2019, the Industrial Development Corporation (IDC) approved upwards of R14 billion in infrastructure funding for roads, human settlements, water infrastructure, schools, student accommodation and public transport.
To support job creation an amount of R600 million has been provisionally allocated to support rural and township entrepreneurs.
The Employee Tax Incentive has been extended to 2029 to enable more employers to take advantage of its provisions to hire more young people.
The President and Deputy President David Mabuza are due to convene regular meetings with the National Economic Development and Labour Council to review progress in the implementation of the Jobs Summit commitments.
The President said government was pursuing a purposeful industrial strategy in partnership with social partners to develop Master Plans for sectors with high potential for growth.
Government has already begun work with sectors such as the clothing, textiles and footwear, poultry, the sugar industries and steel and downstream metal fabrication.
Funding to the tune of R600 million has been allocated over the Medium-Term Expenditure Framework to support the clothing and textile sectors.
In June, a number of Chinese companies signed agreements with their South African counterparts to buy more than R25 billion of South African goods.
This will help to boost production, growth and jobs in the local economy, the President said.
The African Continental Free Trade Area, which is planned to come into effect on 1 July next year, is expected to fundamentally reshape the South African economy.
Already, exports to other African countries support about 250 000 South African jobs.
To improve the levels of investment in the economy, government will host the Second South Africa Investment Conference from 5 to 7 November this year.
This will build on the success of the 2018 conference where commitments of R300 billion were made by local and international companies in support of government’s R1.2 trillion investment drive.
Of the R300 billion committed at the inaugural Investment Conference, around R250 billion worth of projects are in the implementation phase.
There has been a significant turnaround in flows of foreign direct investment, surging from R26.8 billion in 2017 to R70.7 billion in 2018.
President Ramaphosa outlined a set of priority reforms to improve the ease of doing business and reducing the cost of compliance.
Technical Working Groups comprised of officials in the relevant departments have begun work on five of the indicators: starting a business, paying taxes, registering property, trading across borders, and dealing with construction permits.
The President positioned the recently enacted Competition Amendment Act as a bulwark against economic concentration, which is a major constraint to growth in the South African economy.
The new laws will give the competition authorities the ability to address abuse of dominance and high concentration that keeps small and emerging companies out of the economy.
The combined efforts of the Department of Trade and Industry, the IDC and partnerships with the private sector are expected to provide support of over R40 billion to black industrialists over the next five years.
The IDC is expected to provide R11 billion in support to women-empowered enterprises alone, and further funds will be made available for youth enterprises.
Through spatial interventions like special economic zones, reviving local industrial parks, business centres, digital hubs and township and village enterprises, economic development is taking effect in local areas.
“If we are to achieve the South Africa we want, we need to forge durable partnerships between government, business, labour, communities and civil society,” said President Ramaphosa.
“Government is hard at work to create an enabling environment, use public resources wisely and invest in developing the country’s human potential,” he said.