Ramaphosa Pledges Relentless Focus on South African Growth

(Bloomberg) -- South African President Cyril Ramaphosa unveiled a host of measures to get the struggling economy back on track, including the imminent sale of additional spectrum to mobile-network operators and increased spending on new water infrastructure, roads and student accommodation.

“We cannot turn our fortunes around without a relentless focus on growth,” Ramaphosa said in his state-of-the-nation address in Parliament in Cape Town on Thursday. “Within the next decade it is our ambition that our economy should be growing at a rate far greater than our population.”

The keynote speech came six weeks after general elections that saw the ruling African National Congress secure its sixth straight outright win, albeit with a reduced majority, and Ramaphosa is now under pressure to deliver on the party’s pledges to halve a 28% unemployment rate and address rampant poverty.

He faces an uphill battle -- the economy contracted an annualized 3.2% in the first quarter as power outages shuttered factories and shops.

Economic Zones

The government will focus on expanding the automotive, agricultural and mining industries, and will set up special economic zones and industrial parks, with a view to spurring development and creating jobs, according to Ramaphosa. The process of licensing the additional spectrum sales will begin within a month, and once complete should help bring down high data costs and promote competition in the telecommunications industry, he said.

A former labor unionist who helped negotiate an end to white-minority rule, Ramaphosa took power 16 months ago after the ANC forced Jacob Zuma to step down following his scandal-marred nine-year rule.

He’s embarked on a drive to secure $100 billion in new investment and vowed to crack down on graft, appointing a new head of the National Prosecuting Authority and fired a number of officials and executives and managers at state companies who’ve been implicated in corruption.

Key highlights from the speech

• Struggling state power utility Eskom Holdings SOC Ltd. will get “a significant portion” of the 230 billion rand ($16 billion) it needs “in the early years” of the next decade to remain solvent.
• The government intends to halve the rate of violent crime.
• Priority is being given to introduce a package of reforms that will make it easier to do business, including cutting red tape and making it easier to get licenses.
• Ramaphosa reaffirmed the independence of the central bank and said its mandate would remain unchanged.
• The government will speed up the release of public land for housing and farming.
• The National Prosecuting Authority will be strengthened and efforts will be intensified to recover funds stolen from the state.

To contact the reporters on this story: Mike Cohen in Cape Town at mcohen21@bloomberg.net;Paul Vecchiatto in Cape Town at pvecchiatto@bloomberg.net

To contact the editors responsible for this story: Karl Maier at kmaier2@bloomberg.net, Paul Richardson

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