First, some good news. The fact that the economic recovery plans presented this month by business and the governing party have strong areas of overlap should not be overlooked and should be welcomed.
The consensus that has emerged on the need to pick up the pace and scale of infrastructure development is particularly important, given the economic and social multiplier effects associated with such investments.
Business for South Africa’s (B4SA’s) economic recovery strategy paper includes a list of 12 priority initiatives, mostly infrastructure- related, which could bolster gross domestic product by R1-trillion, create up to 1.5-million jobs and increase yearly tax revenues by R100-billion in the coming three years.
The paper follows hot on the heels of the recent Sustainable Infrastructure Development Symposium South Africa, at which President Cyril Ramaphosa argued that infrastructure should be the “flywheel” of the country’s economic recovery from Covid-19. It also coincided with the release of a discussion document published by the African National Congress’s (ANC’s) economic transformation committee, which asserts that mobilising society around an infrastructure-led recovery should be the “first pillar of a new policy framework” introduced to address the economic damage associated with the pandemic and the country’s response to it.
B4SA has also called for the establishment of a joint reconstruction task team to coordinate the implementation of the country’s recovery plan, which it argues will require public and private funding of R3.4-trillion over the coming three years. Again, this is a constructive proposal, particularly given the limited scope for the injection of new public resources for infrastructure, which means the financing and deployment muscle of the private sector will be required.
There also seems to be growing consensus in the always fraught area of mining policy, with the 30-page ANC document arguing that listings of mining companies should be encouraged, while investing in exploration should be incentivised. Minerals Council South Africa responded positively, saying it was pleased to note the approaches proposed to reinvigorate the country’s mining industry.
As with infrastructure, the potential for mining progress is largely in the hands of South Africans rather than difficult-to-control external factors. While boosting infrastructure investment relies on creating frameworks for joint public-private action, reigniting mining investment hinges largely on dealing with lingering policy uncertainties.
The bad news is that all this has been known for years, yet little progress has been made to deal decisively with the policy uncertainties, or with inappropriate investment frameworks and a seemingly dismal lack of capacity to implement policies and programmes when they finally are agreed.
The downright ugly news is that, even when a highly destructive and visible crisis has emerged, such as load-shedding, South Africans have failed, for more than a decade, to shift both the debates and the policy frameworks in ways that could facilitate a sustainable remedy. This, despite there being many opportunities and much private appetite to do so.
Should the same be true of this country’s Covid-19 recovery effort, then heaven help us all!