The ruling African National Congress (ANC), through its Economic Transformation Committee, on Friday launched the Covid-19 Economic Reform Discussion document, ‘Reconstruction, Growth And Transformation: Building A New, Inclusive Economy’ highlighting the economic interventions necessary for job creation, growth and investment in the South African economy amid the coronavirus (Covid-19) pandemic.
Addressing the media via a virtual media briefing, ANC chairperson of the National Executive Committee Sub-Committee of Economic Transformation Enoch Godongwana said various sectors of society, as well as the public, could provide responses to the document, as part of the ANC’s policy development process.
He noted that there had recently been a large focus from business, government and labour to develop economic restoration plans following the impact of Covid-19 on South Africa’s already weakened economy.
The ANC’s approach highlights an infrastructure-led revival of the economy with new investment in energy, water and sanitation, roads and bridges, human settlements, health and education, digital infrastructure and public transport.
The ANC’s strategy mirrors the Integrated Resource Plan’s focus on job creation and growth through energy investments.
It also envisions the fast-tracked industrialisation and expansion of productive sectors as a result of further international and regional trade.
“To achieve significant job creation multipliers, the emphasis will be on localisation, including maximising the use of South African materials and construction companies as well as labour-intensive methods. The establishment of an infrastructure development agency in The Presidency will help to drive infrastructure investment, as will expanded use of public-private partnerships,” outlined Godongwana.
Government’s district development model must also be bolstered to improve service delivery and infrastructure expansion in rural and urban areas, he said, and stressed the importance of coordination for improved service delivery, as well as for the development of new spatial forms in settlement and transport.
The framework also seeks investment in agriculture, manufacturing, mining and tourism, while calling for “decisive progress” to reform telecommunications through the speeding up of the digital migration and spectrum allocation.
FISCAL SUSTAINABILITY & PENSION FUND ACT
Meanwhile, fiscal sustainability will come from macroeconomic policy instruments, says Godongwana.
“The National Treasury, South African Reserve Bank, development finance institutions (DFIs) and private financial institutions all have a role to play. The mobilisation of funds for increased investment in infrastructure and key productive sectors will inevitably require a combination of public and private resources. As part of this combined effort, changes should be made to Regulation 28 under the Pension Funds Act to enable cheaper access to finance for development,” he said.
The ANC's paper says amending the Pension Funds Act will help DFIs access private savings to fund long-term infrastructure and high-impact capital projects.
Further, banking practises are called into question with the suggestion that risk frameworks be adjusted to be more inclusive.
Godongwana said regulators should be focussed on ensuring more competition in banking, which he says limits financial access for small businesses and the historically disadvantaged.
The Presidency must be strengthened and be involved in economic policy coordination, while managing policy execution with government’s economic cluster.
“In order to facilitate a society-wide mobilisation of financial and real resources to advance South Africa’s economic reconstruction, processes of social dialogue and social compacting, both at national and sectoral level, will be required to unite in action key constituencies including business, labour, community and government,” said Godongwana.