Incoming administration must sustain economic reforms, says Ramaphosa

10 June 2024 - 11:54
By Sisanda Mbolekwa
President Cyril Ramaphosa says regardless of the form or composition of the incoming administration, it is important the momentum of reform be retained and sustained. File photo.
Image: Freddy Mavunda President Cyril Ramaphosa says regardless of the form or composition of the incoming administration, it is important the momentum of reform be retained and sustained. File photo.

President Cyril Ramaphosa has motivated for the incoming seventh administration to not abandon his momentum of economic reform.

The president said reform continuity is important, fearing a change in direction would derail progress made and take the country back to the starting blocks.

“While we have come a long way in the reform journey, there is much work to be done to reignite growth in our economy. Regardless of the form or composition of the incoming administration, it is important the momentum of reform be retained and sustained,” he said in his weekly newsletter.

The sentiment was echoed in a recent study by the Bureau for Economic Research (BER), an independent research institute, on South Africa’s economic trajectory after the recent general elections.

Ramaphosa said the study referred to existing structural reforms, saying there is no need “to reinvent the wheel’”, and that sustained implementation of the existing reforms had far greater currency than “miracles or fairy tales for a better outcome”.

“We have said it will take time for the impact of many of the reforms to be fully felt. At the same time, the process of recovery and rebuilding is well under way.”

Ramaphosa’s sixth administration focused largely on economic growth, transformation and job creation.

The president said since 2019 his cabinet has implemented reforms to remove the constraints which have held back growth to attract higher levels of investment, and to make the economy more efficient and competitive.

“In 2020 we established Operation Vulindlela, a government-wide initiative to accelerate the implementation of the reforms and support economic recovery.

“Because well-functioning network industries are vital to economic growth, we have undertaken far-reaching reforms in energy, logistics, the water sector and telecommunications.”

Ramaphosa said the reforms include an overhaul of the energy sector to enable efficiency, stability and greater investment in electricity generation and to introduce a more competitive electricity market.

“We have introduced private sector participation in the operation of port terminals, enabled open access to the freight rail network and completed the auction of high-demand broadband spectrum.

At this important moment in the life of our nation, eradicating poverty and inequality and reducing unemployment must remain our overriding collective priorities
President Cyril Ramaphosa

“While we recognise the value of public-private partnerships, we have stressed the state must continue to play a strategic role in the development and ownership of public infrastructure in the interest of the people.”

In the pursuit of attracting critical skills needed to boost the economy and grow the tourism sector, the president said his government has implemented reforms to overhaul the visa regime.

“The progressive implementation of these structural reforms has helped to improve investor confidence.

“This has enabled us, despite an extended period of load-shedding, to attract investment into the economy across a range of industries. The structural reform process has produced tangible results and laid the groundwork for sustainable growth into the future.”

While discussions are held between political parties around the formation of a government of national unity, Ramaphosa said there is broad support for the continuation of economic reforms.

“At this important moment in the life of our nation, eradicating poverty and inequality and reducing unemployment must remain our overriding collective priorities. We cannot address these challenges and improve the lives of our people without attracting more investment in our economy and accelerating growth.”

Ramaphosa emphasised the need for sound macroeconomic management.

“As the minister of finance noted in this year’s budget speech, successful efforts to improve the fiscal position, complete structural reforms and bolster the capacity of the state will in combination reduce borrowing costs, raise confidence, increase investment and employment and accelerate economic growth.”

The president said this approach is supported by the BER study, which shows continuing the path of reform could increase growth.

“This would start to make a meaningful dent in our unemployment rate and usher in a new era of growing prosperity for all.

“As the country prepares for a new democratic administration, all parties need to work together to sustain the momentum of reform, growth and transformation. A stable and effective government committed to economic reform will enable us to build an inclusive and growing economy that benefits all South Africans.”

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