World News – CA – Ramaphosa promises 800000 jobs

JOHANNESBURG – President Cyril Ramaphosa this week put his head on the block, telling South Africans that the country would only have to endure power cuts until at least 2022 while committing to create 800,000 jobs in the medium term

Ramaphosa has committed R100 billion over the next three years to create jobs through public and social employment

He said the government would target the employment of 300,000 school assistants, 40,000 teaching posts, 6,000 additional community health workers and nursing assistants as well as 60,000 jobs in maintenance and heavy construction. labor-intensive municipal and rural infrastructure roads

Ramaphosa said his plan for reconstruction and economic recovery had mobilized a trillion rand war chest for priority interventions on major infrastructure programs, a rapid expansion of energy capacity, a revival of large-scale employment, coupled with an intensive localization campaign and industrial expansion

He said the government would invest R340 billion in the short term, with R30 billion going to a number of projects that would result in the creation of 190,000 homes across the country Ramaphosa said the plan will increase economic growth by 3% per year over the next 10 years

« We aim to do this primarily through a large infrastructure program and a large-scale employment boost, coupled with intensive localization and industrial expansion, » Ramaphosa said, adding that security energy would be achieved within two years with additional supply accelerated to cope with electricity constraints

He said the Infrastructure Fund will provide R100 billion in catalytic finance over the next decade, thereby leveraging as much as R1trln in new investment for strategic projects

The plan has been very well received as the first step in reviving the struggling economy, but concerns have been raised about how the plan will be financed without cutting spending by a nearly depleted budget. p>

Old Mutual chief economist Johann Els said the plan contained some aspects that would help build confidence and bring economic growth to better levels than seen in the past 5-10 years

Els, however, said he was concerned to hear about the job recovery as he planned to expand public employment when the government is expected to reduce this rate

He said the government should cut spending cuts envisioned in the June supplementary budget

« We should definitely develop this. This is the absolute wrong approach to try to stimulate the economy through additional spending or by reducing spending cuts, » Els said.

« In summary, the rhetoric was for the most part as expected and lacked real reform measures. A real ‘whatever it takes’ approach was missing to bring medium term growth to 25% and above on a sustainable basis « 

The South African economy is reeling from the Covid-19 pandemic, which resulted in a 1% contraction and loss of more than 2 million jobs between April and June

Ramaphosa said the government wants to unlock more R1trln in infrastructure investments over the next 4 years, create and support job opportunities

« According to the modeling done by the National Treasury, the implementation of this plan will bring growth to about 3 percent on average over the next 10 years, » he said

Ramaphosa reiterated a number of structural reforms, including the restructuring of Eskom into separate entities and accelerated applications for own-use production projects

He said the government would finalize a long-term solution to Eskom’s 480 billion rand debt burden, which has been an albatross for the South African tax authorities for decades

Business Unity South Africa (Busa) said there was no indication of how the commitments would be funded Busa chief executive Cas Coovadia said the projected shortfall of $ 300 billion rands and Covid-19 would worsen South Africa’s credit rating the country to raise funds

« We will therefore have difficulty raising funds in the capital markets and will compete for these funds with other emerging countries which are also looking to rebuild their economies, » Coovadia said

« Commitments on the fiscal crisis will also have to make tough decisions on cutting public spending »

Cyril Ramaphosa, Economic recovery, South Africa, Planning, economy, economy