This is South Africa’s economic recovery plan – including creating 800,000 new jobs

 ·15 Oct 2020

President Cyril Ramaphosa outlined the economic reconstruction and recovery plan for South Africa to parliament on Thursday afternoon (15 October).

The plan aims to expedite the recovery of South Africa’s economy that was, like most economies, deeply affected by the Covid-19 pandemic, the president said.

The presidency said that the objectives of the plan are to:

  • Create jobs through infrastructure development and mass employment programmes;
  • Reindustrialise the economy – focusing on small businesses and strengthening medium and large businesses;
  • Accelerate economic forms, investment and growth;
  • Fight crime and corruption;
  • Improve the capability of the state.

Necessary lockdown

Ramaphosa said that the country’s hard lockdown aimed to restrict the coronavirus spread – with as many as 500 coronavirus cases reported in the country each hour at its peak.

He said that the average number of daily cases is now much more stable at around 2,000 cases a day. However, he cautioned that the country could see a resurgence of cases and a second wave as seen in other countries.

To this end, he said that measures must be intensified to reduce the case to less than 1,000 new cases a day. This means that South Africans must adjust to the ‘new normal’  and remain vigilant, he said.

The latest Quarterly Labour Force Survey for the second quarter showed that as many as 2.2 million jobs were shed in the country during this period.

By the extended definition, which includes those people who have actively given up looking for work, the real unemployment rate in South Africa climbed from 39.7% to 42% over the period.

Stats SA also revealed that GDP fell by just over 16.4% between the first quarter and second quarter of 2020, resulting in an annualised growth rate of -51%.

 800,000 new jobs 

Ramaphosa said that government is determined to create jobs for both those South Africans who lost their jobs during the coronavirus lockdown as well as those who did not have jobs before the pandemic

“We aim to do this through a major infrastructure program and large-scale employment stimulus, coupled with an intensive localisation drive and industrial expansion.”

Combined these initiatives will support over 800,00 jobs in the immediate-term, the president said. It will also unlock over R1 trillion in infrastructure development over the next four years.

Other benefits include

  • The infrastructure development will also result in a decrease in data costs and broadband penetration;
  • This will include an efficient and secure energy supply to the country within the next two years;
  • The president said that the implementation of his plan will contribute an additional 1.7% to the baseline of 1.3% economic growth, taking the average growth over the next 10 years to approximately 3% per annum.

“This will be transformative, inclusive, digital, green, sustainable and it will invest our human capital to lay the foundations of our future.”

Ramaphosa said that infrastructure development has immense potential to stimulate growth in the country and to create sustained employment – both directly and indirectly.

He said that as of the end of June 2020, the country had 276 ‘catalyst projects’ which would contribute over R340 billion in investment.

“We must get out people back to work, back into their jobs, the jobs that were lost during the pandemic,” the president said.

“We are determined to create more employment opportunities. Those who were unemployed before the pandemic, or who had given up looking for work.”

“This means unleashing the potential of our economy,” he said, including the removal of regulatory barriers that increase cost and create inefficiencies.

Public employment and extension of Covid-19 grant

Speaking on where South Africa’s 800,000 jobs will come from, Ramaphosa said that the public sector will play a major role in hiring.

He said that R100 billion to create jobs through public and social employment as the labour market recovers.

Some of the job opportunities that will be created include:

  • As part of 300,000 job opportunities to be created for education assistants at the country’s schools;
  • More than 60,000 jobs will be created will come for municipal infrastructure and road maintenance;
  • 6,000 community health workers and assistant to assist with the implementation of the NHI.

This stimulus will also provide additional support in vulnerable sectors such as small-scale farmers and workers in childhood development.

Ramaphosa said that special Covid-19 grant will be extended by a further three months (until the end of December) to assist those in distress and help with additional support.

“The stretched nature of our financial resources does make it impossible to extend it beyond these three months,” he said.


Ramaphosa said that government is rapidly accelerating its energy plans to focus on renewable resources, battery power and storage.

This will contribute 11,800MW of new power to the country’s electricity grid by 2022, he said. In the medium-term government is looking to sign deals with independent power producers to bring an additional 2,000MW of power to the group.

He said that the government is also working to restructure Eskom which will open the door for independent power producers going forward.

Ramaphosa pledged that government will also address Eskom’s growing debt issues as part of this restructuring.

Industrialisation and focus on local

“To place our economy on a new trajectory, we are going to support massive growth in local production and make South African exports much more competitive.,” the president said.

He said that this will include renewed support to grow South Africa’s businesses and exports.

“If we were to manufacture just 10% of imported annual good locally, it is estimated that we could add two percentage points to our GDP,” he said, “If South Africa is to supply just 2% to Africa, it could add 1.2 percentage points to our annual GDP.”

As part of the plan, a range of consumer products will be prioritised for local procurement, the Ramaphosa said.

He said that the government will soon publish ‘localisation targets’, that locally-made materials will be prioritised and that government will help establish supplier programmes for large businesses.

“We call on every South African to contribute to the recovery effort to buy locally made products and services. This is one way that every one of us can contribute to the rebuilding of our economy,” he said.

“Many countries that have seen exponential growth have relied on locally-made products.”

Other priorities include:

  • A focus on women-led businesses;
  • The introduction of a new e-visa system as well as visa waivers to more country’s to boost tourism;
  • A list of expanded countries which will be allowed to travel to the country under the level 1 lockdown restrictions;
  • The release of the high-frequency broadband spectrum by March 2021;
  • Internet connection subsidies for low-income households;
  • The implementation of a turnaround strategy at SARS;

Fiscal plan

Ramaphosa said that finance minister Tito Mbwoeni will publish more information on the country’s fiscal consolidation plans at his medium-term budget at the end of October.

This will include details around the reduction of the country’ high-debt levels as well as rationalisation of the country’s state-owned enterprises.

Rmamaphosa indicated that some of the country’s state-owned enterprises could be publicly listed to help raise capital.

Read: We don’t need another plan from Ramaphosa – this is what we should focus on instead: Dawie Roodt

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