Ramaphosa Sets Out Plans to Revive South African Economy

JOHANNESBURG (Capital Markets in Africa) – South African President Cyril Ramaphosa unveiled plans to revive the flagging economy and create jobs, including removing obstacles to investing and doing business, attracting more tourists, and stepping up the fight against graft.

“We are undaunted by the considerable difficulties we have yet to overcome,” Ramaphosa said in his annual State-of-the-Nation address in Parliament in Cape Town on Thursday. “Above everything else, we must get our economy working again.”

The keynote speech came three months before general elections that will serve as a referendum on whether Ramaphosa, 66, is turning the tide against mismanagement and graft that marred his predecessor Jacob Zuma’s rule. Opinion polls indicate he’s making headway, with the ruling African National Congress poised to win about 60 percent of the vote.

South Africa aims to secure a top-50 position in the World Bank’s ease of doing business ranking within three years by reducing red tape and other hindrances to investment, Ramaphosa said. It currently ranks 82nd out of 190 nations. The government is also targeting attracting 21 million tourists by 2020, up from 10 million last year.

Ramaphosa announced that a unit will be set up within the National Prosecuting Authority’s office to investigate serious corruption focusing on evidence that’s emerging from a judicial inquiry into the looting of state funds. The new body will report to the National Director of Public Prosecutions and not the police, like the Scorpions crime-fighting unit that the ruling party disbanded in 2008 when it investigated graft charges against its then-leader Zuma.

A former labor unionist who helped negotiate an end to white-minority rule, Ramaphosa took office a year ago after the ANC forced Zuma to step down. He’s won praise for his drive to secure $100 billion in new investment and for replacing the boards and top managers of state companies that have been dogged by corruption allegations.

Even so, the economy hasn’t expanded more 2 percent since 2013, and a divisive debate on planned constitutional changes that will enable the government to take land without paying for it has spooked investors. The ANC says that measure is needed to address racially skewed ownership patterns that persist a quarter-century after the end of apartheid rule.

Key highlights from the speech

• Struggling state power utility Eskom Holdings SOC Ltd. will be split into generation, transmission and distribution entities under a single holding company, and the government will provide it with financial support, to be announced in the budget on Feb. 20.
• The new investigations unit will tackle serious corruption focusing on evidence that’s emerging from judicial probes into the looting of state funds.
• National elections will be held on May 8.
• The government will consider selling some state assets and bringing in strategic equity partners for others.
• Special economic zones will be set up for the clothing industry.
• An electronic visa system will be introduced this year.
• A rapid response team will be established to tackle water problems.

Source: Bloomberg Business News