To make good on his pledge to revive an ailing economy, South Africa’s President Cyril Ramaphosa announced a multi billion dollar stimulus programme. The programme will provide funds for job creation and infrastructure development.
The president said it was imperative the government put the funds at its disposal to better use. Speaking to reporters in Pretoria, Ramaphosa said “we have to resort to reprioritising our budget”. He acknowledged that there is no room for more spending or borrowing.
Ramaphosa noted that 50 billion rand ($3.5 billion) of “reprioritised expenditure and new project level funding” will be used to boost economic growth and create jobs. He also said the government will launch a 400 billion rand ‘medium term’ infrastructure fund.
The South African president said “the central element of the economic stimulus and recovery plan is the reprioritisation of spending towards activities that have the greatest economic effect”. When he took over from former President Zuma, whose term of office was plagued with scandal, Ramaphosa promised to champion the economic revival of the country.
The Finance Minister, Nhlanhla Nene said that the 50 billion rand fund would come from under performing government programmes, but gave no further details about how much will be new funding and how much will come from other projects.
To reduce its 27 percent unemployment rate and alleviate poverty and inequality, South Africa needs faster economic growth. Ramaphosa said “our economic challenges are huge and our difficulties are severe and in the end will take extraordinary effort and they will also take some time”.
He added that “for several years our economy has not grown at the pace we need to create enough jobs”.
South Africa, the continent’s most industrialised economy, having stagnated for a decade, slipped back into recession for the first time since 2009.