Government is putting flesh on the bones of the Medium Term Development Plan (MTDP), aiming for a stable macro-economic framework by investing in infrastructure, creating a conducive regulatory framework that supports growth, and implementing a forward-looking Industrial Policy.
This is the word from president Cyril Ramaphosa, tabling his annual State of the Nation Address (SONA) yesterday evening (12 February).
“The foundation of this plan is investment, particularly in public infrastructure, as well as labour intensive growth sectors that are capable of future growth. These include the digital and green economy, where young people will find employment opportunities.”
Pointing out that government has committed more than R1-trillion in public investment over three years to build and maintain infrastructure, he adds that innovative funding models aim to reduce risk and attract investors to fast-track projects in energy, water, transport and digital infrastructure.
Ramaphosa says electricity – the foundation of industrial development – will become cheaper as renewables are brought on board and supply is diversified.
“Regulatory changes have enabled a massive and growing pipeline of investment in renewable energy. By 2030, more than 40% of our energy supply will come from cheap, clean and renewable energy sources.
“We are establishing a level playing field for competition, so that we are never again exposed to the risk of relying on a single supplier to meet our energy needs. We are restructuring Eskom and establishing a fully independent state-owned transmission entity. This entity will have ownership and control of transmission assets and be responsible for operating the electricity market.”
A dedicated task team under the NECC will address issues relating to the restructuring process, including clear timeframes for its phased implementation.
This year will also see the first round of independent transmission projects to enable private investment in expanding our national grid.
Logistics are also under the spotlight. Private rail operators can now access the network, while major public-private partnerships in our port terminals and rail corridors will results in a concession model that preserves public ownership while mobilising private investment and expertise.
An international port operator will manage the Durban Pier 2 Container Terminal, investing in equipment and infrastructure to return it to world class standards.
Preperations are underway for high-speed rail covering routes such as Johannesburg to Musina, and eThekwini to Johannesburg. Nearly 30 companies have indicated their willingness to participate.
“We are determined to compete in a rapidly changing global economy,” Ramaphosa says. “In a world where countries are looking to diversify their supply chains, we have an opportunity to increase our exports across the globe.”
The country is strengthening its capacity for trade negotiations and expanding missions abroad, while supporting established industries and reviving some of those under threat.
“We know that we can create millions of good quality jobs in sectors such as agriculture, mining, services and the green economy,” he adds.
The services sector, including digital technology and financial services, is growing.
“Our financial institutions are some of the best in the world and they have the ability to compete in Africa and across the globe.
“We are attracting major investment in digital infrastructure, with 55 data centres already built and more than R50-billion of investment expected over the next three years.”
Tourism is booming, and there are plans to extend the Electronic Travel Authorisation System to all countries that require a visa, enabling applications for tourists to be processed digitally within 24 hours.
“The biggest opportunity of all lies in green growth. We are pivoting our economy to be a leading supplier of the products which the world will rely on in decades to come,” Rampahosa says. “We are expanding support for the manufacturing of green products for global markets, from fertiliser to jet fuel, chemicals to steel.”
For instance, from March this year, a 150% tax deduction will apply for investment in new energy vehicles. And government will support the local production of batteries.
“International pledges to the Just Energy Transition Investment Plan now stand at approximately R250-billion,” he adds. “This is financing large-scale investment in manufacturing, infrastructure and skills.”
South Africa has some of the world’s largest reserves of critical minerals, and investments are planning in geological mapping and exploration. In addition, local beneficiation of critical minerals and the export of finished products will continue.