South Africa

News24.com | Ramaphosa: SA's economic recovery must be 'state-led'

President Cyril Ramaphosa at the State of the Nation Address on February 13, 2020 in Cape Town.

President Cyril Ramaphosa at the State of the Nation Address on February 13, 2020 in Cape Town.

Jeffrey Abrahams/Gallo Images via Getty Images

Likening the effects of the Covid pandemic to those of a war, President Cyril Ramaphosa has said that SA's economic recovery must be "state-led".

The president was replying to a question about what form SA's economic recovery would take in the National Assembly via a virtual platform. 

"I have often said we need to look at the post-Covid economic landscape as being equivalent to a post-war economic landscape," he said.  

"The state has to play a critical role. Even in your more conservative countries in the world are saying the state now needs to play its role."

He said that state had to "look at" how the market is functioning and structured, and whether "previous policies" still hold up or needed to be changed.  

"That is precisely what we are now looking at in government," he said. 

Economists have predicted that the economy shock of the pandemic will cause South Africa's GDP to decline by between will by at least by 5% and 10%, exacerbating South Africa's already dire unemployment rate.  

The main focus of the state's economic support was the the announcement of R500 billion support package in mid-April. The package is set to include about R95 billion in new lending from international finance institutions, which has not yet been received. 

While not providing details, he said that jobs would be created by expanding public employment and upping investment in public infrastructure. 

He said that the presidency would next week bring to together funders, policy markets, state-owned enterprises, academics and member of the private sector to look at investment opportunities in infrastructure. 

"We should wee infrastructure investment as a mobiliser of growth,' he said. Infrastructure would make an a "significant part" of the stimulus SA's economy needs, he added. 

In response to a question about SAA, Ramaphosa said that in "many countries around the world" the state needed to support public and private enterprises due to the economic impact of the coronavirus.

He added that the state would be looking at the business rescue plan proposed by the airline's business rescue practitioners "very closely". 

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