A number of experts have criticised President Cyril Ramaphosa’s economic recovery plan, labelling it a “wish list of imaginary blessings” and the recycling of old and failed policies.
Speaking to the City Press, Free Market Foundation founding director Leon Louw called for bold pro-market reforms instead of the same promises South Africans have seen before.
“What’s bad about this plan is the recycling of old, failed policies, such as trying to make SOEs efficient, the massive redistribution from wealth-producing to wealth-consuming activities, and wanting to produce locally what should be imported,” he said.
SA Communist Party first deputy secretary Solly Mapaila told the City Press that the idea that South Africa is insolvent is a lie and called for the use of funds from pension schemes.
“We have enough money. We have enough resources in retirement funds and pension funds,” he said.
“These funds belong to South African workers and should drive development.”
Ramaphosa presented the government’s plan to rescue the South African economy following the negative impact of the COVID-19 pandemic on 15 October.
He said the plan aimed to provide growth that was both inclusive and transformative, building on the common ground between government, businesses, and labour.
Ramaphosa’s recovery plan
The economic recovery plan aims to create jobs, reindustrialise the economy, accelerate economic reforms, and crack down on corruption, amongst others.
“The creation of jobs is central to the economic recovery plan,” Ramaphosa said.
The President explained that the economic recovery plan has four priority interventions, which are as follows:
- Infrastructure rollout – Increased investment in projects to improve social development infrastructure such as schools, water, sanitation, housing, and critical road and rail systems.
- Expanding energy generation – The acceleration of the Integrated Resources Plan (IRP), which will provide a substantial increase in the contribution of renewable energy storage.
- Employment stimulus – The creation of more jobs in the public and private sectors, beginning with the employment of 300,000 people as educational support staff and large-scale job interventions by government and social partners.
- Industrial growth – Support of local production and an increase in exported goods, driven by localisation targets for goods in areas such as healthcare, basic consumer goods, construction materials, and transport rolling stock.
Terrible, archaic, and disturbing
The country’s economic recovery plan was also met with criticism by analysts ahead of its announcement last week.
Analysts described it as “terrible, archaic, and disturbing”, and Centre for Economic Development and Transformation founding director Duma Gqubule went one step further, saying the government has no economic recovery plan.
Mirroring Louw’s criticism, a number of analysts said the plan lacked a coherent economic programme which will lead to economic recovery and is merely a “list of items with no strategic thinking”.
Gqubule said the plan looks like it was written by an intern. “At least 95% of the items mentioned in the economic recovery plan have not been costed,” he said.
He added that this plan is no different from previous wish lists which this government has provided over the last decade or two.
The Daily Maverick’s analysis of the plan, done by Ed Stoddard and Tim Cohen, echoes these views.
“Much of the wish list includes goals that the ANC-led government has long aspired to but never achieved,” they said.