REFORMING AND RECOVERING :Saving Lives and The Economy

REFORMING AND RECOVERING :Saving Lives and The Economy

“This is no ordinary year, and this is no ordinary Sona [State of the Nation Address],” said President Ramaphosa in February, perhaps one of the most eagerly awaited Sona’s in almost three decades.The President took the chaos and uncertainty and attempted to carve out a clear path to achieving the goals the state has set for itself:

1. Overcome the coronavirus pandemic

2. Speed-up economic recovery

3. Implement economic reforms

4 . Deal with corruption and increase state capacity

Here we look at the response to Covid-19 andthe government’s plan for economic reform andrecovery.

COVID-19 RESPONSE

“The health and safety of our citizens remains our most paramount concern,” said President Ramaphosa in his State of the Nation Address.

The government continued to use a range of tools to suppress the spread of the virus. Lockdowns remained key to limiting movement, as were restrictions on the number of people gathering, both indoors and outdoors. The vaccine rollout was critical to reducing mortality, although uptake of the vaccines has been slow, with less than 14 million adults fully-vaccinated towards the end of November, well short of the government’s target of having 67% of the population vaccinated by the end of 2021.

Phase 1 of the vaccination rollout was for frontline healthcare workers. The second phase broadened the scope to include persons over 60, persons over 18 with comorbidities and those classified as essential workers. The last phase, accounting for almost half of the total population, began in mid-2021.

Vaccines were distributed according to the doses the government had available, with the J&J shots allocated for people who would find it difficult to get a second dose, such as the homeless and people in rural areas who have to travel long distances to access healthcare.

Covid response by the numbers:

• R19.3-BILLION+ allocated for the cost of vaccines

• 73 MILLION+ vaccine doses ordered since February

• Contingency reserve INCREASED from R5-billion TO R12-BILLION

• Provincial equitable share raised by R8-BILLION for Covid response

• 9.5 MILLION Social Relief of Distress BENEFICIARIES

ECONOMIC RECOVERY AND REFORM

“There is a consensus amongst the social partners that there should be a substantial structural change in the economy that would unlock growth and allow for development,” states the government’s EconomicReconstruction and Recovery Plan.

The recovery plan is broken down into three phases:

1. Engage and Preserve

2. Recovery and Reform

3. Reconstruct and Transform

The first phase is about reining in the coronavirus. The second is getting the economy to where it was but still managing the risks from the virus. The last phase is transforming the economy and safeguarding it against threats.

In order to implement reforms and interventions, resources will have to be mobilised, policies and regulatory frameworks adjusted. Increasing state resources and engaging with stakeholders will be key. Underpinning the recovery strategy are goals set in the National Development Plan’s Vision 2030.

Some of the priority interventions asset out in the plan:

• Infrastructure Investment

• Mass public employment

• Localisation, reindustrialisation and export promotion

• Inclusion of women and youth

Some of the structural reforms thestate is implementing include:

• Releasing broadband spectrum

• Diversification of energy supply

• Third-party access to rail network

• Rolling out the eVisa system

REFORM AND RECOVERY BY THE NUMBERS

• 5.4% growth rate for the economy

• 6% reduction in unemployment

• Investments to make up 30% of GDP

• Working capital loans with interestrates between 0 - 2%

• Target of 2.5 million jobs by theend of 2020/2021

• 5 million jobs by the end of2023/2024

• R100-billion of Covid supportpackage for job creation andretention

SOURCES gov.za treasury.gov.za