President Cyril Ramaphosa addresses members of the media at the Union Buildings on measures agreed upon by Cabinet to reignite growth, stimulate economic recovery and secure confidence in sectors affected by regulatory uncertainty and inconsistency. Picture: SIYABULELA DUDA
President Cyril Ramaphosa addresses members of the media at the Union Buildings on measures agreed upon by Cabinet to reignite growth, stimulate economic recovery and secure confidence in sectors affected by regulatory uncertainty and inconsistency. Picture: SIYABULELA DUDA

Perhaps the most significant thing about President Cyril Ramaphosa’s announcement of a package of measures to stimulate the economy was what are these days called “the optics”.

Ramaphosa finally appeared like a man who is in command when he took to the podium in Pretoria to deliver the much-anticipated announcement.

He has, until now, been careful to kick every controversy into touch, saying he will rely on the outcome of consultations to drive his agenda. But on Friday he was, for the first time, clear and decisive. And he played to a key strength: his ability to organise and direct large operations.

He announced that the disastrous visa regime introduced by then home affairs minister Malusi Gigaba, which discouraged travel to SA with red tape, was coming to an end “immediately”.

He announced that the mining charter has been revised to make it more investor friendly and that the much-loathed Minerals and Petroleum Resources Development Act (MPRDA) has been shelved. 

He announced that he was taking charge of the land matter — until now under the management of his scandal-plagued deputy, David Mabuza. It seems to have finally dawned on Ramaphosa that how this issue is shepherded is critical to the country’s economic prospects. A panel, which included “business-oriented” leaders and even farmers, will advise him on the way forward.

Perhaps most significantly, he announced a new R400bn SA Infrastructure Fund. The government will put up R400bn with a view to leveraging investment from the private sector, banks and global financial institutions. Ramaphosa ruled out borrowing from the International Monetary Fund (IMF), saying he would look to the New Development Bank instead.

It remains to be seen exactly how this fund will work, but Ramaphosa said business and labour are enthusiastic. He spoke of the fund having a “blended finance kind of character”.

It could be that Ramaphosa is finally going to let the private sector into infrastructure ownership and management, a much-needed step that might finally turn all the decades of promises into actual projects. As if to underscore this, he announced a dedicated infrastructure team that will “identify and quantify shovel-ready projects, such as roads and dams” to get this going.

All of this is fairly impressive given that Ramaphosa has very little ammo for an economic battle of any kind. He admitted as much, saying there was no new money to allocate and that all government could do was "re-prioritise” existing spending.

“We have limited fiscal space to increase spending or increase borrowing … we do not have fiscal space to pour money in the economy ... we have to resort to re-prioritising our spending and budget within the current fiscal framework​.”

He said such re-prioritisation would address the parlous state of public hospitals, the lack of sanitation in schools and public works opportunities, especially for young job seekers.

These pronouncements on social spending seemed out of place in a speech about economic stimulus, but Ramaphosa is probably trying to show that his measures are not just about high finance, but are also directed at improving the lives of ordinary people.

The rand strengthened prior to and during the announcement, but retraced its steps once the markets began to digest the announcement. The scepticism is understandable. The government has made vast infrastructure pronouncements in the past, only to fail to follow up with actual shovels on the ground, as it were.

Ramaphosa must now show he can turn all of this talk into visible action if he wants to demonstrate that he is different to those who came before.