[ad_1]
The National Council for Economic Development and Labor (Nedlac) agreed on an action plan for South Africa’s economic recovery, the presidency said in a statement on Tuesday evening (September 15).
The plan is aimed at building confidence and putting South Africa on a path of investment and growth.
“The social partners have identified priority areas for the reconstruction of the economy, as well as structural reforms and other programs that will allow sustainable and inclusive growth with an intensive focus on job creation,” said the presidency.
While final details of the plan will only be announced once it is finalized by the cabinet, the presidency said a central focus will be addressing Eskom’s financing and structural issues.
“The social partners also agreed on a social pact that commits the government, companies, workers and the community to mobilize funds to address the Eskom financial crisis in a sustainable way, in exchange for an efficient, productive and adequate Eskom that generates electricity in affordable prices for communities and industries, ”he said.
A copy of the agreement, which has been viewed by Bloomberg, calls for Eskom’s 488 billion rand debt to be reduced and adequate resources “mobilized” to ensure it is financially sustainable, but does not provide details on how this will be done.
The plan does not mention an earlier proposal by Public Investment Corp, which administers pensions for state workers and has assets of R2.1 trillion, to take over part of Eskom’s debt. Institutions that make funds available must do so within mandates and risk mitigation processes cannot be compromised, he says.
Other key points of the agreement include:
- The pact commits the government to remove all regulatory obstacles that prevent companies from generating their own electricity, while the companies agreed to implement projects to add 2,500 megawatts of supply within two years;
- The government also agreed to purchase an additional 2,500 megawatts of emergency power, 500 megawatts more than previously announced;
- Eskom was given the green light to renegotiate excessively onerous contracts with coal suppliers and independent green energy producers that supply the national grid as soon as possible;
The president welcomed the social partners’ economic recovery plan as a demonstration of collaboration that had produced “a significant milestone in the history of our democracy and the advent of a new era of trust”.
“This is a great achievement that is up to the challenge of the moment,” he said.
Infrastructure development
Working day reports that another key pillar of the plan will be infrastructure, with a massive development push seen as key to boosting post-closure recovery and job creation.
This comes after the presidency released a list of ‘priority infrastructure projects’ projects, which are expected to pave the way for the start of private investment in a R2.3 trillion program over the next decade.
President Cyril Ramaphosa has said that infrastructure development will form a key part of South Africa’s economic response to the coronavirus pandemic.
“Investors from multilateral development banks, development finance institutions and the private sector showed a strong appetite for making the investments necessary to meet South Africa’s vast and diverse infrastructure needs,” it said in a statement in July.
“In the coming weeks we will work with our social partners to finalize an economic recovery program that brings together the best of all the various proposals. The most important part of this program must be the protection and creation of jobs ”.
Ramaphosa said that if the country wants to recover from the worst effects of the pandemic, it also needs well-designed public employment schemes.
“Creating jobs for people who add value to their communities through maintenance, care work and other services, keeps people engaged in productive activity. It helps them retain and develop skills, ”she said.
Read: Push to reopen South Africa’s international borders next month
[ad_2]
