President Cyril Ramaphosa has announced new measures to reignite growth, stimulate economic recovery and secure confidence in sectors affected by regulatory uncertainty and inconsistency.
Speaking at a press conference on Friday (21 September), Ramaphosa said that this will include both financial and non-financial measures – focusing primarily on youth, women, small business, infrastructure and local government.
These were six of the biggest announcements made:
New visa rules
Ramaphosa confirmed that the department of home affairs is working on a number of visa-related reforms which will make it easier for tourists, business people and academics to come to South Africa.
The reforms include amendments to the regulations applying to foreign minors travelling to South Africa, which is expected to be gazetted in October.
Negotiations on visa waivers and relaxation of visa requirements for certain countries are also being finalised, while an e-visa pilot is set to begin in the coming months.
Ramaphosa added that home affairs would also revise the current requirements for specialist and critical skills visas.
Ramaphosa said that government would initiate the process for allocation of high-demand radio spectrum to enable licensing within the next few weeks.
“This will unlock value in the telecommunications sector, increase competition, promote investment and reduce data costs,” he said.
“Lower data costs will also provide relief for poor households and increase the overall competitiveness of the South African economy.”
The issue of spectrum allocation has been a major point of contention in South Africa’s telecommunication sphere for a number of years, with telecom companies frequently citing lack of spectrum for high data costs and the roll-out of new technology.
The problem has been exasperated by the government which is yet to complete its digital migration programme and a lack of direction on how spectrum should be distributed.
Cost of doing business
Ramaphosa acknowledged the high cost of doing business in South Africa and indicated that the government had been in consultation with the private sector regarding some of the biggest concerns.
“To reduce the cost of doing business, to boost exports and to make the South African industry more competitive, the government has begun a review of various administered prices, starting with electricity, port and rail tariffs,” he said.
Reallocation of spending – with a focus on Agriculture
The central element of the economic stimulus & recovery plan is the reprioritisation of spending towards activities that have the greatest impact on growth and job creation, with a particular emphasis on township and rural economies, women and youth.
“Our government has limited fiscal space to increase spending or borrowing, it is imperative that we make sure that the resources that we do have are used to the greatest effect,” he said.
“The reprioritisation of spending we are outlining as part of this stimulus and recovery plan will take place within the current fiscal framework and in line with the normal budgetary process.
“Re-prioritised funding will be directed towards investments in agriculture and economic activity in townships and rural areas. Agriculture has massive potential for job creation in the immediate and long-term.
“The interventions we have identified will include a package of support measures for black commercial farmers so as to, increase their entry into food value chains through access to infrastructure like abattoirs and feedlots.”
He added that a blended finance system will be mobilised from the Land Bank, Industrial Development Corporation and commercial banks. The Land Bank is currently concluding transactions that will create employment opportunities in the agricultural sector over the next 3 to 5 years.
Infrastructure and township funds
One of the biggest announcements was the establishment of a new infrastructure fund.
The fund will draw money from both government and private resources and the state-owned fund manager, the Public Investment Corporation.
According to Bloomberg, who spoke to government insiders before the announcement, the national budget will be reorganised – but the borrowing ceiling won’t be breached.
Ramaphosa said that a township and rural entrepreneurship fund would also be established to provide finance to either scale up existing projects or provide start-up capital for new projects.
“We have prioritised the revitalisation of three regional and 26 township industrial parks as catalysts for broader economic and industrial development in townships and rural areas,” he said.
As part of the work to develop agriculture and ensure effective land reform, Ramaphosa said that he has appointed an advisory panel on land reform that will guide the Inter-Ministerial Committee (IMC) on Land Reform chaired by deputy president David Mabuza.
“The 10-person panel is to advise government on the implementation of a fair and equitable land reform process that redresses the injustices of the past, increases agricultural output, promotes economic growth and protects food security,” he said.
“Further details of the mandate and composition of the panel will be made available in a separate statement. In the second instance, reprioritised funding will also be re-directed towards igniting economic activity in townships and rural areas.”