Measures to address structural economic constraints

President Cyril Ramaphosa says as the country repairs the damage caused by the Coronavirus pandemic, government will be implementing measures to address structural economic constraints.

The President was responding to oral questions from the National Assembly on Thursday.

He said that even before the Coronavirus pandemic, South Africa’s economy has been experiencing low growth over a number of years.

“The pandemic has exposed some of the structural fault lines in our economy, including the vulnerability of small businesses and those in the informal economy.

“Therefore, as we repair the damage caused by the pandemic, we will be implementing measures to address the key structural constraints in the economy.

“These include the mismatch between skills produced and the new skills required in a 21st century economy, and the spatial patterns of development that keep millions of workers far away from workplaces,” he said.

The President said government will also need to address the reality of a poorly-developed small and medium business sector within an economy that has large concentration of market share and ownership in too few hands.

He said there was a need to provide access to capital for many young entrepreneurs, women-owned enterprises and black industrialists.

“As we rebuild the economy after Coronavirus, we will speed up structural reforms that can unleash enterprise and capitalise on the digital economy and the larger markets that are possible through the African Continental Free Trade Area.”

He said steps have already been taken in a number of areas to address these challenges.

This includes industry masterplans that have been developed in sectors such as automobile manufacturing, clothing and textiles, poultry production and the sugar industry, as well as reforms in energy policy and the decision to release spectrum in the market.

“If we are to achieve an inclusive economy, we need to deal with the historical injustices in relation to land ownership, access and use.

“Expediting land reform for a more productive economy without weakening our fiscal position will require, among other things, a social compact between the State and private landowners on how to release more land.

“The initiative by Anglo American to donate land to the State is an indication of what is possible if we share a common vision as a country.

“Another example is the PALS [Partnership in Agricultural Land Solutions] initiative in the Witzenberg valley, where commercial farmers have been working with local communities and farm workers to promote land reform.

“Government is working with the agricultural industry to develop a sector plan, which will focus on growth areas such as the livestock, wool and grain industries.”

The President said recent auctions have highlighted livestock wealth among black farmers, which indicates that an inclusive, targeted initiative has the potential to transform the livestock value chain.

He also said that the release of State-owned land and post-settlement support has commenced.

“Over 100 000 hectares have already been allocated to successful beneficiaries, and the intention is to release all the remaining 700 000 hectares by the end of the financial year.

“Transformation must be pursued with greater vigour so that we have more equitable outcomes and a greater number of jobs.

“Above all, building a more inclusive economy will enhance longer-term growth, productivity and development for all South Africans,” he said.