With South Africa being at risk of losing a potential multibillion rand investment by Ford, Finance Minister Enoch Godongwana has emphasised the important role that cities and provinces play in creating an enabling environment for investment.
“We need to get the basics right. This entails reducing regulatory constraints, providing effective services, as well as coordinating and sequencing economic interventions,” Godongwana said on Wednesday.
Addressing Parliament during the debate on the 2022 Fiscal Framework and Revenue Proposals, the Minister said the country could lose a potential multibillion rand investment by Ford for an electric vehicle plant.
“Ford has already invested R16 billion in the Tshwane Automotive Special Economic Zone, where it is producing its Ford Ranger model. This is the largest foreign direct investment project our country has seen in recent times, and has already created around 8 000 jobs.
“Ford intended to invest further in bringing its electric vehicle production to South Africa. This, however, has been put at risk because the City of Tshwane has been unable and perhaps unwilling to secure the electricity the new plant needs.
“The Tshwane example reminds us that a deficit of political will at municipal level makes it massively harder than it should be to create conditions for job-rich growth,” the Godongwana said.
Public sector wage bill
As part of addressing the public sector wage bill, a Public Sector Labour Summit is scheduled to take place at the end of this month.
The summit is an important opportunity for all stakeholders to engage honestly and transparently and chart a path towards a more sustainable public service and remuneration guidelines.
The Minister said much has been made of the $750 million loan that government took from the World Bank.
“The World Bank loan has no conditionalities attached. It does not in any way threaten the sovereignty of our country. We considered all forms of concessional and non-concessional funding necessary to address the shortfall between our revenue and our expenditure. We then chose an affordable option available to us,” the Minister said.
In this year’s State of the Nation Address, the President announced the extension of the Social Relief of Distress grant to March 2023.
“The President further indicated that in this period, detailed technical work and engagements will take place to identify the best options to replace this grant. In this regard, work is underway to review the grants system, with a view to developing an optimal support mechanism for grants recipients.
“The review will also inform our approach to long-term social security for South Africa,” the Minister said.
This includes considerations regarding:
- social assistance;
- social insurance;
- active labour policies, and
- artisan training for learners exiting vocational training, where the intention is to engage not only the private sector, but also municipalities and State-owned enterprises to equip learners in Technical and Vocational Education and Training (TVET) colleges with the relevant industry experience to enable them to transition to gainful employment.