Reigniting our economy

From the Union Buildings

In the State of the Nation Address in February this year, I announced a range of measures that government would undertake in partnership with all sectors of our society to country on a new path of growth, employment and transformation.

Since then, we have taken clear steps to rebuild investor confidence in our economy, end corruption and state capture, restore good governance at state-owned enterprises and strengthen critical public institutions.

Even as our country is going through difficult economic challenges we have made progress.

We are reforming our economy and creating an environment that is conducive to investment, and have embarked on a drive to attract $100 billion dollars in investment by South African and international investors over the next five years.

For several years our economy has not grown at the pace needed to create enough jobs or lift communities out of poverty.

Added to that, our economy has weakened in recent months, partly due to global factors such as a rising oil price, and deteriorating trade relations between the US and other major economies. Emerging markets such as Turkey and our own have been negatively impacted by these global trends.

Government is responding to these challenges, many of which are outside our control, to stimulate inclusive growth that will ultimately deliver the jobs and the better lives that all South Africans want and deserve.

Government knows what it means for families to pack fewer food items into shopping trolleys and baskets when prices rise, or what it means for workers to stress about taxi fare when fuel prices go up. And when rising prices impact on businesses, it is often the livelihoods of workers that end up being threatened.

We want to rid our society and our economy of such stresses and pressures, and we want all South Africans to benefit from growth and development.

In line with this, I recently announced an economic stimulus and recovery plan that consists of five key areas that will help revalitise our economy. These are the implementation of growth enhancing economic reforms, reprioritisation of public spending to support job creation, the establishment of an Infrastructure Fund, addressing urgent and pressing matters in education and health and investing in municipal social infrastructure improvement.

We will also prioritise economic activities that will have the greatest impact on youth, women and small businesses.

Government is fast-tracking the implementation of key economic reforms that will unlock investment opportunities, grow the economy and create much-needed jobs.

These include revising visa requirements to boost tourism and attract highly skilled foreign nationals. Tourism plays a role in growing our economy and creating jobs and has been earmarked in the National Development Plan as one of the core sectors for job creation.

The revised Mining Charter will also be implemented to ensure that the mining industry is transformed and inclusive. By making it easier for investors – South African and international – to enter our mining sector, we will see more businesses emerging, and more businesses mean more jobs.

We also plan to reduce the cost of doing business by reviewing the prices of electricity, port and rail tariffs in order to boost exports and make South African industries more competitive.

Government is negotiation with the corporate sector to lower data costs so that we can provide relief for poor households and increase the overall competitiveness of the South African economy.

We also want to encourage South Africans to support small business and cooperatives, and to stop buying illegal goods as this is a form of individual corruption which leads directly to job losses.

Government spending will be reprioristised towards activities that have the greatest impact on economic growth, domestic demand and job creation, particularly for township and rural economies, women and youth.

We will also increase support for black commercial farmers through blended finance from the Land Bank, the Industrial Development Corporation and commercial banks. This will help to increase their entry into food value chains and access to infrastructure like abattoirs and feedlots. In line with this we also want to finalise the signing of 30-year leases to enable farmers to mobilise funding for agricultural development.

To ensure that our economy is more inclusive, government will establish a township and rural entrepreneurship fund to provide finance to scale up existing projects or provide start-up capital for new projects.

The sanitation situation in many of our schools is unacceptable and to address this, funds will be allocated to ensure the speedy completion of 1 100 sanitation projects in public schools.

I announced these and a number of other financial and non-financial measures to help resolve the economic challenges that we are facing as a country.

I have no doubt that this stimulus and recovery plan will not only reverse the slowdown of our economy, but that it will result in a visible and sustained improvement in the lives of all South Africans.

As South Africans, we have confronted challenges far greater than this before. By working together, we managed to end the system of apartheid and set our country on the path to a peaceful transition to democracy.

We must come together once more to grow our economy, create jobs and transform our country.

All South Africans must join hands and make an extraordinary effort to overcome the economic challenges we face.

It is, as Madiba said, in our hands.