The 4 sectors getting a boost from Ramaphosa's stimulus package | Fin24
 
  • Credit Rating

    Moody's has (again) said that weak state-owned entities are a risk to SA's sovereign credit rating.

  • SARS Inquiry

    Judge Nugent has recommended the president sack suspended SARS boss Tom Moyane.

  • Nene Rand Rollercoaster

    Simon Brown says savvy investors worked out how the rand would react to uncertainty at Treasury.

Loading...

The 4 sectors getting a boost from Ramaphosa's stimulus package

Sep 22 2018 07:35
Sibongile Khumalo

The economic stimulus package unveiled by President Cyril Ramaphosa on Friday morning is geared to inject capital into key labour-intensive sectors that over the years contributed to low growth indicators and large-scale job losses.

Details of how Finance Minister Nhlanhal Nene will reprioritise spending to fund the stimulus plan - and what "trade-offs" he will have to make, are set to be announced at the mini budget in late October. 

The stimulus plan - parts of which Ramaphosa said can be immediately implemented - will, among other things, focus on the following areas.

Agriculture

The president announced that investment would be channelled to black commercial farmers to "increase their entry into food value chains through access to infrastructure like abattoirs and feedlots". 

According to the president, the agricultural sector has "massive potential for job creation in the immediate and long term". He added that the Land Bank, Industrial Development Corporation and commercial banks would be roped in to provide funding to revive the sector.

"A significant porting of the funding will go towards export-oriented crops that are highly labour intensive," said Ramaphosa.

The agriculture sector has been facing several challenges in recent years, including droughts, job losses, rising input costs and tensions regarding land reform - which Ramaphosa has insisted will be carried out legally. 

According to the Agricultural Business Chamber, the sector shed a total of 109 000 jobs in 2017, with the Western Cape the worst hit. Overall, agriculture has seen a decline in employment of 8% since 2016. It also lost the largest percentage of jobs compared to other sectors.

Infrastructure development 

A R400bn Infrastructure Fund will be used to reduce "the current fragmentation of infrastructure spend" – with large-scale projects focused on building of schools, national roads, housing and water infrastructure.

The projects will help accelerate service delivery, which is at the core of the government’s priorities.

In a country where projects often hobbled due to corruption and irregular expenditure, Ramaphosa said a special execution team from his office would be tasked with overseeing the design and implementation of the projects.

Tourism

Tourism has, in recent years, been one of the sectors showing growth in SA. However, some argue it has more more recently been hamstrung by user-unfriendly visa requirements that hit tourist numbers and kept skilled workers away.

Amendments will be made to the controversial regulation that requires visitors travelling with children under the age of 18 to provide unabridged birth certificates for these children when entering or exiting the country.

The requirement, which came into effect in 2015, was blamed by critics for a drop in tourist numbers.

Malusi Gigaba, during his first stint as minister of home affairs, had attributed the requirement of unabridged birth certificates and written permission from legal guardians to an attempt to curb human trafficking.

Lowering of data costs

The high cost of communication has been identified as one of the areas hindering the development of small business enterprises. 

In a bid to address telecommunication challenges, government will start the process of allocating high-demand radio spectrum.

The availability of spectrum would unlock value in the telecommunication sector and increase competition, eventually leading to lower data costs. 

Mobile phone operators have voiced concern over the lack of radio spectrum, arguing that slow pace of spectrum allocation affects the roll-out of high speed internet connectivity.

* Sign up to Fin24's top news in your inbox: SUBSCRIBE TO FIN24 NEWSLETTER

Follow Fin24 on Twitter and Facebook. 24.com encourages commentary submitted via MyNews24. Contributions of 200 words or more will be considered for publication.

NEXT ON FIN24X

 
 
 
 

Company Snapshot

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

The appointment of Tito Mboweni will:

Previous results · Suggest a vote

Loading...