A draft of the economic recovery plan negotiated by the government, business and labour in the National Economic Development and Labour Council, which is circulating informally, commits all partners to crucial “short-term collective actions” to enable recovery and build confidence, and a longer-term framework to build a more labour-absorbing economy.
The plan, in the making between the social partners for two months, is the latest of many attempts at social compacting since 1994, in an effort to create jobs and boost an economy that was in recession even before the Covid-19 outbreak.
However, it does stand out from its predecessors in that, in the short term especially, the recovery plan provides the basis of a to-do list that could unblock pressing regulatory and efficiency bottlenecks. Previous social compacts and government growth strategies have failed through ineffective implementation.
President Cyril Ramaphosa, who in his address to the nation on Wednesday described the plan “as a historic milestone”, acknowledged last week that his government’s biggest shortcoming was its inability to implement plans and policies. Implementation will be driven by career public servant and engineer Sean Phillips, seconded from the Development Bank of Southern Africa (DBSA) to the Treasury, and presidency staff including Rudi Dicks and presidential economic adviser Trudi Makhaya will drive implementation.
The plan’s overarching framework for economic development comprises three areas: infrastructure-led growth; initiatives to build productive capacity, especially in manufacturing; and a strategy to put in place enablers of economic growth that would improve the environment for companies, especially small and medium ones, to flourish.
In various renditions, these focus areas have been part of every growth and industrial action plan since 1994, with poor results. Weak implementation, a tendency to include a large number of “priority” areas and a lack of collective commitment by all members of the executive have been largely to blame.
The short-term collective actions cover 15 areas, several with time frames attached. For instance, at the top of the list is increasing energy security, which includes stabilising Eskom financially and operationally; making self-generation for projects larger than 1MW easier; holding a fifth window for renewable independent power producers by January 2021; and the construction of liquefied natural gas terminals at Coega, Richards Bay and Saldanha.
The second, digital inclusion, sets a deadline of digital migration from analogue broadcasting of March 2021; releasing high-demand spectrum to electronic communication network services licence holders by December 2020; and licensing network services for the wireless open-access network and setting aside spectrum for new entrants.
Among the other collective actions are: targets for procurement of locally manufactured goods, both by public and private sector; actions to encourage tourism; stabilising mining by developing a competitive exploration strategy and reducing time frames for licences by 50%; and regulatory reform, for instance to enable skilled immigration.
The fight against corruption and crime also receives attention with a commitment from the government to report all procurement on an open platform and an extension of the ban on public servants doing business with the government to all politically exposed people, such as politicians and their immediate family.
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