Economic Recovery Plan: Three things South Africans can expect

Cabinet ministers, along with President Cyril Ramaphosa, have been discussing and deliberating over a post-lockdown Economic Recovery Plan. The plan will not be made public until perfected. 

The cabinet, which resumed its meeting on Monday 20 April, is expected to release a document containing key strategies and priorities to save the South African economy and hopefully lessen the damage which has rampaged through the nation due to a global pandemic and a consequential — extended — lockdown. 

Three things we can expect from the Economic Recovery Plan

Wits University School of Economic and Business Sciences Professor, Jannie Rossouw, provided her expert opinion. 

Rossouw told The South African, that in her opinion, there are three things we can expect from the Economic Recovery Plan. 

The three essential things are as follows: 

1. Re-appropriation of amounts allocated in the February 2020-budget to more pressing spending needs; 
2. An indication by how much spending in the 2020 budget will increase and the impact on the government’s deficit before borrowing; and 
3. Progress with the implementation of the growth plan that the National Treasury published towards the end of last year.

Unpacking economic strategies 

According to Rossouw, the three points can be unpacked as follows: 

In terms of re-appropriating amounts allocated in the February 2020 Budget Speech, this means the government has to decide which areas of the economy desperately need the money and which areas not so much. 

Due to the pandemic and the lockdown, the budget will change dramatically. Areas, we once thought needed money desperately, can now be put on hold for more pressing matters. 

“For instance, should the Department of Sport get any money if there are no sporting events?” said Rossouw. 

Roussouw also indicated that the budget would increase, therefore, affecting the government’s deficit before borrowing. 

“There is no doubt that the government will spend more than budgeted, while at the same time revenue will decline.  As a result, the deficit before borrowing will increase. We need to understand to what level it will grow,” said Rossouw.

Lastly, the Wits professor pointed to the growth plan that was released by the National Treasury. 

“The Treasury tabled a clear plan for placing the South African economy on a trajectory to higher growth. This is the time for the roll-out of this plan, so give us commitments and timelines,” added Rossouw. 

Two other experts that The South African contacted said they could not provide comment as they are deliberating with ministers and the president on how to save the economy, in other words, contributing towards the Economic Recovery Plan.

This points to the fact that the government is calling in experts all over the country to try and revive the South African economy.