Minister’s 14 point plan makes some progress

In July, the Minister of Finance, Malusi Gigaba announced a set of 14 actions agreed to by Cabinet to revive investment. In the Medium Term Budget Policy Statement (MTBPS), released today, it is stated that the plan has made progress on several fronts:

• A new board and CEO have been appointed to lead a turnaround at South African Airways (SAA).
• The Budget Facility for Infrastructure, which is intended to overcome shortcomings in the planning and execution of large infrastructure projects,has begun considering proposals.
• New procurement regulations have been implemented.
• The Financial Sector Regulation Act has been signed into law.

Furthermore, work is under way to license broadband spectrum, optimise government’s asset portfolio, reform the governance of state-owned companies and encourage private-sector participation in public investment programmes. A stronger package of measures to stimulate economic growth is being developed, the MTBPS said.

It added that Government continues to prioritise the expansion of network infrastructure to support the economy, alongside social infrastructure that serves community needs.

The public sector will spend more than R300 billion each year on infrastructure, with about half of this funded directly from the budget.

“To sustain economic growth, these measures need to be accompanied by microeconomic reforms that raise productivity and labour absorption. These include taking strong steps to transform markets, improve national competitiveness through innovation, break down structural barriers to new economic participants, promote manufacturing development and deconcentrate industries dominated by a few producers. Such reforms need to be complemented by plans to reconfigure the urban landscape, which remains dominated by inefficient and inequitable patterns of settlement.

The document noted that Government is acting to break out of the’ low-growth trap’.

“A new cycle of inclusive development requires clear intervention to stimulate economic activity, ensure effective regulation, improve the competitiveness of manufactured exports, promote localisation and reindustrialise the economy. This in turn requires renewed attention to strengthen the capacity of the state to develop the country’s economic potential.