President Cyril Ramaphosa. (Ziyaad Douglas)
Massive infrastructure development, re-industrialisation and a shift towards exporting processed, rather than raw, minerals will be at the centre of the government of national unity’s programme for the next five years.
At the same time, the government will maintain its social grant system, while trying to bring down the cost of living by zero-rating more foods and cutting the cost of petrol by reviewing administrative costs.
President Cyril Ramaphosa unveiled the immediate priorities agreed upon by his 10-party administration during his opening of parliament address in Cape Town on Thursday evening.
Cabinet members, deputy ministers, premiers, directors general and municipal officials agreed upon a basic programme around three basic priorities for the new government at the weekend at the first extended lekgotla.
These were to drive inclusive growth and job creation; to reduce poverty and deal with the high cost of living and to create an ethical, effective developmental state — all issues addressed in government’s Operation Vulindlela and contained in the manifestos of the ANC’s new coalition partners.
Medium-term policy would be developed at subsequent planning and strategy sessions, which would “translate these priorities into a detailed plan and interventions that the government will implement over the next five years”, Ramaphosa said.
Immediate steps would include simplifying the regulations around public private partnerships to enable greater investment in both social and economic infrastructure development.
“From our largest metros to our deepest rural areas, we have a clear intention to turn our country into a construction site, as roads, bridges, houses, schools, hospitals and clinics are built, as broadband fibre is laid and as new power lines are installed,” the president said.
Investment would be encouraged in labour-intensive sectors such as services, agriculture, green manufacturing and tourism.
Noting that it was “sad” that so much of South Africa’s mineral wealth was exported in raw form, Ramaphosa said new jobs would be created by focusing on “processing our minerals so that we export finished products rather than raw commodities”.
While the rights of workers would continue to be protected, the government would pursue a smart industrial policy focusing on the competitiveness of the economy, while companies would be given incentives to invest in businesses that served export markets.
Existing industry master plans would be assessed and revised to improve their effectiveness and extended to sectors in which overarching strategies had not been developed as yet, he said.
Ramaphosa promised assistance for small business and the informal sector, which he said had been identified as key areas which “hold the greatest potential for inclusive growth and job creation”.
“We will pay particular attention to supporting small- and medium-sized enterprises in townships and rural areas. We will take economic activity to where most of our people live so that more jobs can be created,” he said.
He also promised rapid deregulation across sectors to make doing business — and investing — easier.
“Red tape debilitates the creation of jobs. Every department and every public entity has been directed to reduce the undue regulatory burdens that hold back businesses from creating jobs,” Ramaphosa said.
He said state-owned entities (SOEs) would be moved to operate under a single holding company to improve their financial position and operational performance. This would improve accountability, transparency, governance and oversight, while reducing the potential for corruption and boosting their efficiency.
“The establishment of a state-owned SOE holding company will give us greater capacity to build a sovereign wealth fund,” he said. “This has been done successfully by other countries whose sovereign wealth funds have built up capital from the high performance of the state-owned enterprises rather than from the fiscus.”
Ramaphosa said there had been “tremendous progress” in reducing the severity of load-shedding since the announcement of the energy action plan in July 2022 and promised a focus on expanding and strengthening the transmission network over the next five years.
“We will complete the most consequential transformation of South Africa’s electricity industry in more than a century,’ he said.
There was already a “huge” pipeline of renewable energy projects, which would add about 22 500 megawatts of new generating capacity and work was under way to seize the opportunities created by South Africa’s solar and wind resources.
“As we undertake a just transition towards renewable energy, South Africa must create a green manufacturing sector centred on the export of green hydrogen and associated products, electric vehicles and renewable energy components,’ he said.
Ramaphosa expressed his unity government’s continued commitment to economic and social transformation, saying: “We are determined that growth must be inclusive. It must be transformational. Inclusive growth must drive the redistribution of wealth and opportunity.
“It must support the empowerment of black South Africans and women, and all those who in the past had been relegated to the fringes of the economy. This is part of the constitutional imperative to redress the imbalances of the past and deal with the slow process of development,” he said.
Programmes to encourage broad-based black economic empowerment and employment equity would be maintained, as would support to small and medium sized enterprises, and initiatives to stimulate the employment of young people, women and people with disabilities, Ramaphosa added.