The release of radio spectrum is a key enabler for the economic stimulus package outlined today by President Cyril Ramaphosa, who has committed R400-billion on infrastructure spend to kick-start the economy.
“Within the next few weeks, government will initiate the process for the allocation of high-demand radio spectrum to enable licensing,” he says.
“This will unlock significant value in the telecommunications sector, increase competition, promote investment and reduce data costs.
“Lower data costs will also provide relief for poor households and increase the overall competitiveness of the South African economy.”
The president points out that, while progress has been made in ending corruption and state capture, restoring good governance at state owned enterprises and strengthening critical public institutions, the economy is still stalling.
“For several years our economy has not grown at the pace needed to create enough jobs or lift our people out of poverty.
“Public finances have been constrained, limiting the ability of government to expand its investment in economic and social development.”
The stimulus and recovery plan announced today comes ahead of the investor conference planned for 25 October, and consists of a range of measures, both financial and non-financial, that will be implemented immediately.
The plan is to ignite economic activity, restore investor confidence, prevent further job losses and create new jobs, and address some urgent challenges that affect the conditions faced by vulnerable groups among our people.
The stimulus and recovery plan has four broad parts: implementation of growth enhancing economic reforms; reprioritisation of public spending to support job creation; the establishment of an Infrastructure Fund; addressing urgent and pressing matters in education and health; and investing in municipal social infrastructure improvement.
“We are decisively and rapidly accelerating the implementation of key economic reforms that will unlock greater investment in important growth sectors,” Ramaphosa says.
Among the changes are amendments to the visa regime, to boost tourism and make business travel more conducive.
The revised Mining Charter is expected to revitalise the mining industry and provide certainty to investors while charting a sustainable path towards a transformed and inclusive industry.
To reduce the cost of doing business, to boost exports and to make South African industry more competitive, government has begun a review of various administered prices, starting with electricity, port and rail tariffs.
“The central element of the economic stimulus and recovery plan is the reprioritisation of spending towards activities that have the greatest impact on economic growth, domestic demand and job creation, with a particular emphasis on township and rural economies, women and youth,” the president says.
“Our government has limited fiscal space to increase spending or borrowing, it is imperative that we make sure that the resources that we do have are used to the greatest effect.
“The reprioritisation of spending we are outlining as part of this stimulus and recovery plan will take place within the current fiscal framework and in line with the normal budgetary process.”
With agriculture under the spotlight, a 10-person panel has been convened to to advise government on the implementation of a fair and equitable land reform process that redresses the injustices of the past, increases agricultural output, promotes economic growth and protects food security.
The stimulus and recovery plan prioritises infrastructure spending as a critical driver of economic activity.
“With a view to unlocking the potential to create more jobs on a large scale we have decided to set up a South Africa Infrastructure Fund, which will fundamentally transform our approach to the rollout, building and implementation of infrastructure projects,” Ramaphosa explains.
“The South Africa Infrastructure Fund will reduce the current fragmentation of infrastructure spend and ensure more efficient and effective use of resources.
“The private sector will be invited to enter into meaningful partnerships with government in this fund.”
The contribution from the fiscus towards the Infrastructure Fund over the medium-term expenditure framework period will be in excess of R400-billion, which will be used to leverage additional resources from developmental finance institutions, multilateral development banks, and private lenders and investors.
“To ensure these funds are used effectively and that projects are completed on time and on budget, we are establishing a dedicated Infrastructure Execution Team in the Presidency that has extensive project management and engineering expertise to assist with project design and oversee implementation,” Ramaphosa says.
“The team will identify and quantify ‘shovel ready’ public sector projects, such as roads and dams, and engage the private sector to manage delivery.”