President Cyril Ramaphosa has outlined progress made since the announcement of the Economic Reconstruction and Recovery Plan (ERRP).
Delivering the 2021 State of the Nation Address (SONA) on Thursday night, the President said since the launch of the plan on 15 October 2020, the country’s infrastructure investment project pipeline worth R340 billion in network industries such as energy, water, transport and telecommunications has been developed.
“Construction has started and progress is being made on a number of projects,” he said, adding that government has since the launch focused on four priority interventions.
Namely the interventions are:
- a massive rollout of infrastructure throughout the country;
- a massive increase in local production;
- an employment stimulus to create jobs and support livelihoods; and
- the rapid expansion of our energy generation capacity.
Since the announcement of the plan, two major human settlements projects that will provide homes to almost 68 000 households in Gauteng have been launched.
Similar human settlements projects are planned in other provinces while the President’s dream to build smart cities that break from the apartheid special development is becoming a reality.
“New post-apartheid cities are being conceptualised in a number of places in our country. The Lanseria Smart City, the first new city to be built in a democratic South Africa, is now a reality in the making.”
The draft masterplan for the smart city – which will become home to between 350 000 to 500 000 people within the next decade – was completed in November 2020 and is now out for public comment.
On major water infrastructure projects, progress is being including Phase 2A of the Mokolo and Crocodile River project, and the uMkhomazi Water Project.
The Infrastructure Investment Plan identifies roads projects worth R19 billion covering the spine of the South African road network.
Work is underway to finalise project finance structuring for these projects. In addition, resources have been committed from the fiscus to support the construction and rehabilitation of the major N1, N2, and N3 highways.
The President is of the belief that these infrastructure projects will lead to the revival of the construction industry and the creation of much-needed jobs.
Unveiling the plan in October, President Ramaphosa said the Infrastructure Fund would provide R100 billion in catalytic finance over the next decade, leveraging as much as R1 trillion in new investment for strategic infrastructure projects.
On Thursday, he announced that the fund which will blend resources from the fiscus with financing from the private sector and development institutions, is now in full operation.
Its approved project pipeline for 2021 is varied and includes the Student Housing Infrastructure Programme, which aims to provide 300,000 student beds.
Another approved project is SA Connect, a programme to roll out broadband to schools, hospitals, police stations and other government facilities.
Supporting local production
The second priority intervention of the ERRP is to support a massive increase in local production and to make South African exports globally competitive.
Key to this plan is a renewed commitment from government, business and organised labour to buy local which will lead to increased local production, which will lead to the revival of the manufacturing industry.
In turn, all social partners who participated in the development of the plan, as part of a social compact have agreed to work together to reduce the reliance on imports by 20% over the next five years.
A total 42 products – ranging from edible oils to furniture, fruit concentrates, personal protective equipment and steel products – have been identified as those than can be sourced locally.
“If we achieve our target, we will significantly expand our productive economy, potentially returning more than R200 billion to the country’s annual output.”
On supporting SMMEs, the Departments of Small Business Development and Trade, Industry and Competition are supporting SMMEs to access larger domestic and international markets.
The country is firmly on path with its industrialisation plans which is underpinned by sector master plans to rejuvenate and grow key industries such as the poultry master plan.
Government has also worked closely with the auto sector to help it weather the pandemic.
By the end of the year, the sector had recovered around 70% of its normal annual production, in difficult circumstances.
The third priority intervention is an employment stimulus to create jobs and support livelihoods.
The largest numbers of jobs said the President, will be created by the private sector in a number of industries as the economy recovers.
Meanwhile, the Presidential Employment Stimulus is one of the most significant expansions of public and social employment in South Africa’s history.
By the end of January 2021, over 430 000 opportunities have already been supported through the stimulus.
Expanding energy generation
The fourth priority intervention of the Recovery Plan is to rapidly expand energy generation capacity.
The President said restoring Eskom to operational and financial health and accelerating its restructuring process is central to this objective.
“This will lay the foundations for an efficient, modern and competitive energy system,” he said, adding that the power utility is making substantial progress with its intensive maintenance and operational excellence programmes to improve the reliability of its coal fleet.
“We are working closely with Eskom on proposals to improve its financial position, manage its debt and reduce its dependence on the fiscus,” he said.