Efficient Group chief economist Dawie Roodt says that president Cyril Rmaphosa is unlikely to present any ‘new’ information when he delivers his economic recovery plan on Thursday afternoon (15 October).
In an interview with Jacaranda, Roodt said that South Africa already has number of ‘plans’ that it is working towards, with this latest economic recovery presentation just the latest in a long line of proposed turnarounds.
“Whatever the plan is going to be, it will likely centre around infrastructure development and job creation in the country. I am not too optimistic around the plan and I don’t think much will really happen or change.”
Roodt said that this is because the plan has the wrong emphasis and that the focus of government should rather be on making the existing state function properly – especially in problem areas such as state-owned enterprises.
He said that South Africa’s current economic crisis was not due to the coronavirus pandemic but rather due to the country’s lockdown which has proved ‘disastrous’ for the economy.
Roodt said that it is unlikely that any plan will fix the country’s economy and that it will likely take many years to see any sort of recovery.
Ramaphosa’s plan to create confidence
Ramaphosa is expected to appear before parliament this on Thursday to outline the country’s much-anticipated economic recovery plan.
“We need to take extraordinary measures towards a speedy and sustainable economic recovery,” the president said.
The South African economy contracted by 51% in Quarter 2 of 2020. The period coincided with the hardest levels of the country’s lockdown, as government limited movement and economic activity in an attempt to curb the spread of Coronavirus.
Last week’s Cabinet Lekgotla focussed on coming up with a reconstruction and recovery plan focussing on infrastructure, job creation and industrialisation.
Speaking to SAfm on Tuesday, Prof Raymond Parsons from the North West University School of Economics said South Africans were looking forward to a “credible and implementable” plan.
“[A] way that is going to make a difference in our economic prospects,” he said. “It needs to help turn our economy around, implement on key economic reforms, it needs to build investor confidence and, indeed, jobs.”
During the interview, Parsons said the plan was to create confidence, “it is to show that there are new and better ways in which we can guarantee delivery of what we are promising and have promised in a way that will make a difference on the ground”.
“Another important dimension – a test that will be applied on Thursday for the successful implementation of what has been promised – will be the extent to which the private sector is involved and is used to help generate the outcome that we want.
“How the private sector and the markets will react this week will also depend on the timelines on the implementation of what has been promised and to what extent it breaks new ground. We know already graft and delay have been the enemy of delivery,” he said.