Cyril Ramaphosa. GCIS
Cyril Ramaphosa. GCIS

The government is working to solve the economic problems dogging the country, with strategies to help Eskom's recovery and to make SA more investor friendly, President Cyril Ramaphosa has said in his first weekly letter to the country. 

His letter comes at a time when has been a growing sentiment that he was out of touch with the experiences of ordinary people, and was not taking decisive action to drive the country forward.

Earlier in September Ramaphosa was forced to skip a planned trip to New York to attend the annual UN General Assembly to attend to domestic issues, following a flare-up of xenophobic violence and attacks on women.  and children. He had also had to previously abandon his duties at the World Economic Forum in Cape Town to address protesters. 

Ramaphosa’s approach to a weekly letter has echoes of former president Thabo Mbeki, who wrote a number of weekly letters  on topical domestic issues during Jacob Zuma’s reign at the helm of the country. 

On Monday Ramaphosa said he would use his newsletter, called “from the desk of the president”, to discuss issues of interest and the work the government was doing in tackling them.

He wrote that people were deeply concerned about the state of the economy and the “stubbornly high” rates of unemployment in the country.

The SA Reserve Bank predicts the economy will grow 0.6% in 2019. The unemployment rate is 29%, and the expanded unemployment rate, which includes discouraged jobseekers, is at 38.5%.

“These concerns are real. This year, the economy will record growth that is lower than expected (and much lower than what we need). Government finances are stretched about as far as they can go, and several industries are looking at retrenching workers,” Ramaphosa wrote. 

Two key business confidence indicators have dropped to their lowest levels in 20 and 34 years, respectively, as more business people have become pessimistic about the future of SA’s economy. 

On Friday, Ramaphosa appointed his economic advisory council that will, among other things, advise him and his administration on the development and implementation of policies that will assist in kick-starting growth.

He said in his letter that there had been progress on the economic front, and the state had embarked on several reforms to create a more investor-friendly environment, a year since the government announced an economic stimulus and recovery plan. 

“We have finalised a mining charter that has been broadly welcomed by the industry and finalised policy on the allocation of valuable broadband spectrum. We have and continue to make changes to our visa policies,” he said.

Funds had been redirected to stimulate economic activity in areas where the majority of South Africans live, he said, and this included finance to support black commercial farmers, the revitalisation of industrial parks in townships, and the establishment of a township economy fund.

A clear strategy was being finalised to place cash-strapped power utility Eskom on a sustainable path of recovery. Eskom is battling debt of R450bn, which it is unable to service from its revenue.

“All this work is taking place at a time when government’s finances are under great strain, and there is very little room to increase spending or borrowing. This means that we need to spend our limited resources more smartly, get rid of wastage and shift more resources to infrastructure investment.”

mkentanel@businesslive.co.za