Social compact to strengthen economic recovery

Wednesday, February 21, 2018

Government will build a social compact with business and labour to strengthen the recovery of South Africa’s economy.

In the 2018 Budget Review, released following Finance Minister Malusi Gigaba’s tabling of the national Budget, National Treasury said progress has been made in government’s 14 Confidence Boosting measures that were announced by the Minister in July 2017.

“Over the period ahead, government will build a social compact in partnership with business and labour to strengthen the economic recovery. This will include intensifying collaboration with the private sector through platforms such as the CEO Initiative,” said the Review.

The measures - announced by Minister Gigaba at a media briefing at the Johannesburg Stock Exchange - are intended as short-term interventions to complement the structural reform agenda set out in the country’s National Development Plan (NDP).

Among progress made since July 2017 is the appointment of a new board and acting Chief Executive Officer at power utility Eskom. In addition, the Minister of Energy David Mahlobo has instructed Eskom to conclude all power-purchase agreements with independent power producers (IPPs).

Earlier this month, Public Enterprises Minister Lynne Brown announced her approval of Eskom’s application to purchase additional renewable energy from IPPs.

The Budget Facility on Infrastructure received 64 large infrastructure project submissions. Of these, 38 projects that met submission requirements were assessed.

Since July, government granted South African Airways (SAA) R10 billion to settle its short-term debt obligations. A new board, chief executive officer and restructuring officer have been appointed to the national carrier and a turnaround strategy is being implemented.

Cabinet has approved a private-sector participation framework for state-owned companies.

As part of progress made, the Insurance Act, signed into law in November 2017, strengthens the insurance market through higher prudential standards, makes the industry more accessible to new entrants and aligns the sector with international standards.

Meanwhile, work has been completed on a fund to benefit small and medium enterprises, with a particular focus on start-ups. The Competition Commission’s market inquiry to investigate data prices will be complete by end-August 2018. -

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