A sombre President Cyril Ramaphosa on Sunday acknowledged the depth of the crisis facing the country, promising to hold an economic summit to assess the damage caused by the pandemic as well as to speed up structural reforms, many of which have long been in the pipeline.
In his closing remarks to the ANC national executive lekgotla — a biannual meeting to discuss the governing party’s priorities — Ramaphosa said this was the most important lekgotla the ANC has held in recent times. However, the solutions he proposed have been put forward before and have yet to be implemented.
Earlier in the day Ramaphosa delivered an emotional eulogy at the funeral of cabinet minister Jackson Mthembu, his close comrade and friend, who became the first casualty of the pandemic in the executive.
The president repeated the ANC’s commitment to implementation and urgency, which have also been the emphasis of previous presidential addresses. The ANC government, often praised for its policy and plans, has been notorious for its inability to implement them.
"There is a clear appreciation of the urgency of implementation, given the dire state of our economy and high levels of poverty, inequality and unemployment among our people," Ramaphosa said.
While SA’s economy was already in a dire state ahead of the Covid-19 pandemic, the situation has significantly worsened over the past year as job losses soared as a result of the lockdowns imposed to curb the spread of the virus.
Ramaphosa said the lekgotla affirmed the decision that job creation should be at the centre of SA’s economic reconstruction and recovery plan.
"This is the most direct and effective way to respond to the hardship that many families are today facing. We have therefore reaffirmed the priority interventions contained in the plan that emerged from our engagements with social partners last year: infrastructure investment, employment stimulus, localisation and industrialisation, and the expansion of energy generation," he said.
He stressed the importance of moving swiftly to implement these commitments, but that monitoring and evaluation had to be strengthened to ensure more effective consequence management in cases where implementation does not occur.
He said the lekgotla highlighted the need to build a durable social compact between business, the government and labour so they can "harness all our energies and resources to ensure the urgent implementation of the plan in the interests of all South Africans".
Ramaphosa said economic reforms must not only address immediate challenges but also lay the basis for the achievement of the ANC’s broader transformation objectives.
Greater pressure
"Given the significant fiscal constraints the country faces, which will be placed under greater pressure as we roll out the vaccine programme, there is a need to reprioritise existing commitments in the budget to ensure we support those in need and stimulate inclusive growth," he said.
One of the most important issues the lekgotla dealt with was SA’s response to the pandemic. Despite pressure from labour and social partners, Ramaphosa, however, did not mention a possible extension of the Temporary Employer/ Employee Relief Scheme, despite it being discussed at the meeting.
The president said the meeting agreed that the government consider basic income relief to unemployed people who do not receive any state assistance, but that this would depend on the state of public finances and there should be a clear exit strategy on these grants.
He also said the meeting had agreed that the loan guarantee scheme, which was established in May 2020 as part of the country’s R500bn economic and social relief package, would be restructured to improve its accessibility and enable participation of small, medium and micro enterprises, which have up to now not really benefited from this.
He said there was a need to revisit the scheme and restructure it fundamentally.
In his opening remarks to the lekgotla on Friday, Ramaphosa also indicated that the government might not be able to achieve everything it planned due to the pandemic.
This included its landmark policy to overhaul the crisis-plagued national health system.
"While the pandemic has underscored the need for the National Healthcare Insurance (NHI), we must look at what impact it has had on our ability — whether from a capacity or fiscal position — to proceed with the implementation of the NHI," Ramaphosa said.
He said they needed to look at the implication of the Covid-19 pandemic on the nature, scale and pace of the implementation of the NHI.
While the implementation of the NHI is already behind schedule and proceeding very slowly, this is the first time Ramaphosa has come close to acknowledging that the country is too ambitious in its timelines or that it may have to scale back on major social projects.
Just last month health minister Zweli Mkhize told the Financial Mail it was non-negotiable and the NHI must be implemented irrespective of the country’s economic situation.
Despite his comments at the beginning of the weekend, Ramaphosa in his closing remarks on Sunday did not mention whether there were any discussions on the implementation of the NHI.
The NHI is the ANC’s biggest health reform policy for achieving universal health coverage, and aims to ensure everyone has care that is free at the point of delivery.
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