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This resource is hosted by the Nelson Mandela Foundation, but was compiled and authored by Padraig O’Malley. It is the product of almost two decades of research and includes analyses, chronologies, historical documents, and interviews from the apartheid and post-apartheid eras.

R372bn boost for growth plan

03/02/2006 11:49  - (SA)
Lynn Bolin

Cape Town - President Thabo Mbeki has pledged total funding of R372bn to support the government's Accelerated and Shared Growth Initiative for South Africa (Asgisa) and the Expanded Public Works Programme (EPWP) over the next three years.

Outlining the African National Congress' plans to support economic growth in his state of the nation address to parliament on Friday, Mbeki said that, to implement Asgisa, the state-owned enterprises and the public sector as a whole, working in some cases through public-private partnerships would make large in various sectors in order to:

Ø. meet the demand for electricity;

Ø. provide an "efficient and competitive" logistics infrastructure;

Ø. expand and modernise the telecommunications infrastructure; and

Ø. satisfy the demand for water.

He pledged that the public sector would also accelerate infrastructure investment in the underdeveloped urban and rural areas of South Africa through the Municipal Infrastructure Grant, the EPWP, and other infrastructure funds to improve service delivery.

This would include the provision of roads and rail, water, energy, housing, schools clinics, business premises and business support centers, sports facilities and multi-purpose government service centers, including police stations and courts.

Bridge between 'two economies'

These were the programmes that would receive a total of R372bn over the next three years, the President said.

The government would pay particular attention to the EPWP as an important bridge between the "two economies," Mbeki added, as well as a significant part of the ANC's poverty alleviation programme.

Resources for the public works programmes would be pooled to ensure maximum impact, both in terms of products delivered and employment and skills training.

He also promised that the government would introduce better supervision of infrastructure projects, would ensure that its capital budgets were spent without roll-overs and that labour-intensive measures were prioritised, as well as skills training.

The Agsi had identified particular sectors of the economy to prioritise for accelerated growth, including business process outsourcing, tourism, chemicals, biofuels, metals and metallurgy, wood, pulp and paper, agriculture, clothing and textiles and the "creative industries".

Deal to protect textile sector

"In this regard, work is proceeding apace to address such challenges as the cost of telecommunications, and import parity pricing in steel and chemicals.

"We have already reached agreement with China to protect our clothing and textile sector. The second national telecommunications operator should become operational later this year."

In the past year the government had undertaken audits of a number of national government departments to assess their capacity to handle their responsibilities, to help accelerate social transformation, Mbeki revealed.

These had spanned housing, health, education and trade and industry. In all of these audits, the issues of skills, vacancies, delegation of responsibilities and relationships between national and provincial departments had emerged as the most critical areas requiring attention.

He pledged that the government would address these issues.

"We cannot allow government departments to become an obstacle to the achievement of the goal of a better life for all because of insufficient attention to the critical issue of effective and speedy delivery of services."

Developing skills

Under the auspices of the Agsisa, the government, encompassing all three levels, had agreed with its social partners to a "vigourous and wide-ranging" skills development and acquisition programme to meet any skills shortfalls that could arise.

Apart from skills, the Agsisa had identified the cost of doing business and unnecessarily high cost of intermediate inputs as other constraints, as well as the need to expand the micro, small and medium enterprise sector.

The government would take the necessary measures to ensure the effectiveness of its existing programmes in these areas, Mbeki promised.

In the SMME sector, in particular, the government would undertake to improve the regulatory climate, access to capital, entrepreneurial training, marketing assistance and the development of cooperatives.

"Agsisa provides a golden opportunity for the social partners to undertake the collaborative action they have visualised, focused on promoting and mobilising investment and creating decent work for all," he observed.

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