South Africa’s “disturbing” plan for economic recovery

The ANC government’s economic recovery plan presented at a cabinet meeting earlier this week has been described by analysts as “terrible, archaic, and disturbing”, according to a report by the City Press.

Speaking to the publication, analysts described the plan that was proposed by the ANC to facilitate economic growth following the impact of COVID-19 as “a list of items with no strategic thinking”.

The ANC reportedly presented the National Economic Development and Labour Council (Nedlac) economic recovery plan at the meeting, which was described by SA Communist Party spokesperson Alex Mashilo as lacking any form of strategy.

“I don’t want to come across as hard, but maybe we don’t know what a plan is and what a strategy is,” he said.

Centre for Economic Development and Transformation founding director Duma Gqubule told the City Press that the plan was virtually non-existent.

“It looks like it was written by an intern,” Gqubule said. “At least 95% of the items mentioned in the economic recovery plan have not been costed.”

There is reportedly no mention of macroeconomic, monetary, or fiscal policy, which he said was concerning considering the severe damage done by the COVID-19 pandemic to the local economy.

2 million more South Africans without jobs

Last month, Stats SA published its Quarterly Labour Force Survey for the second quarter of 2020, which revealed the terrible effect of the COVID-19 crisis on the economy.

The data showed that more than 2 million people lost their jobs over the period, with the number of employed persons decreasing to 14.1 million.

The number of people classified as “not economically active” increased by 5.6 million.

“The unemployment rate according to the expanded definition increased in all provinces except in the Free State, where it decreased by 3.3 percentage points,” Stats SA said.

“When asked why they did not look for work, most people cited the national lockdown / COVID-19 / coronavirus as the main reason for not actively looking for work,” it said.

Around one in five South Africans received a reduction in pay due to the lockdown, and of the 14.2 million people who were employed during the quarter, 58.1% were expected to work during the national lockdown by the companies they work for.

Problems with economic policy

University of Pretoria senior political studies lecturer Sithembile Mbete previously told Bloomberg that the problem with government’s policymaking is that it is aimed at an economy that no longer exists.

“A lot of the mismatch that we see between government solutions and the problems that we have is because the government is making policy for an economy that doesn’t exist.”

President Cyril Ramaphosa said during his campaign that he would improve economic growth and create jobs, but the results of this have been mixed even despite the COVID-19 crisis.

This slow progress has been attributed to a number of factors – including a lack of urgency from government in creating and implementing economic policies.

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South Africa’s “disturbing” plan for economic recovery