Cabinet to announce details of stimulus package to reignite growth

Thursday, August 23, 2018

President Cyril Ramaphosa says government will, in the coming days, announce details of a stimulus package aimed at reigniting growth and creating jobs. 

The President said this during a question and answer session in the National Assembly on Wednesday. 

He said government has been approached by business leaders across the economy insisting that they want to play and they are playing their part in growing the economy and creating jobs. 

“They too see that the platform is burning. Instead of throwing their hands up in despair, they are determined to be part of the solution. 

“In the coming days, Cabinet will be announcing details of the stimulus package to reignite growth and to establish the foundation of a sustained economic recovery plan. 

“This package reprioritises funds towards initiatives that are labour intensive, addresses infrastructure needs and boosts local economies. This is the job of government. Government, in their management of the economy, has to take several initiatives, [and] has to take certain steps,” the President said. 

Investment Summit to take place in October 

The President said, meanwhile, that creating employment, particularly for young people and women, is the most urgent and critical priority for the country at this juncture. 

He said that the most recent unemployment figures are a clear signal that the country cannot continue at the current pace of economic growth. 

“… Our unemployment figures… are quite on the high side and they are quite worrying. A number of countries around the world are also experiencing precisely the same type of problem that we are experiencing. 

“We must treat unemployment as a burning platform, a challenge that requires extraordinary measures and exceptional efforts that we need to make to address this,” he said. 

The President said to succeed, it is essential that the causes of the massive unemployment rate in South Africa are understood. 

He said the historical reliance on raw commodity exports and the deliberate underdevelopment and economic marginalisation of the majority of citizens has resulted in the structural unemployment that has been a prominent feature of the economy since the 1980s. 

He said following the dawn of democracy, government was able to create jobs on a scale never seen before in the history of the country.  In 1994, there were 8.8 million people working in the country. Today, there are 16.3 million people who are in employment. 

“In other words, in 25 years, we have doubled the number of working people in our economy,” said President Ramaphosa. 

Despite an absolute increase in the number of people employed, the President said, South Africa’s unemployment rate has remained stubbornly high as the population has grown and more people have entered the workforce. 

“Put simply, we have not been creating enough jobs to keep up with those people who enter the labour market on an annual basis seeking work. That is why government is working together with its social partners to address the immediate economic challenges and through far reaching reforms to place the economy on a new path of inclusive growth and job creation,” he said. 

Government has prioritised the task of significantly raising the levels of investment in the economy since it is essential for growth and job creation. 

“One of the ways in which we can increase job creation is through investment. We need to bring investment in our country. We need to get our local companies to invest in the economy and by so doing, increase the number of people who are employed. 

“There has been a significant response to the call that we have made by both South African businesses and international investors to our plans to hold an investment summit, which we are going to have on the 25th to the 27th of October,” said President Ramaphosa.

South Africa's economic development plans are guided by the overarching National Development Plan (NDP), which aims to eliminate poverty and reduce inequality by 2030. It is a plan for the entire country aimed at ensuring that all citizens have equal access to quality services and sustainable livelihoods. -