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Rating Agencies Concerns Under the Spotlight

October 18, 2019

The Presidency

18 October 2019

Increasing efficiency and reducing port costs to improve South Africa’s global trade is one of the short-term interventions devised by government to address concerns raised by rating agencies.

The deputy president, David Mabuza, highlighted this during oral replies in the national assembly.

The deputy president had been asked what measures government was taking to address the concerns raised by rating agencies regarding slow economic growth, sustainability of state-owned enterprises and rising government debt.

Other immediate interventions listed by the deputy president include exploring alternative options to lower electricity prices and eliminating potential load shedding; the tabling of the Draft Economic Regulation of Transport Bill in cabinet soon designed to promote economic growth in South Africa by promoting an effective, efficient and productive transport sector; a review of the Basic Fuel Price under consideration as part of a broader review of administered prices; 82 countries to now receive visa waivers as part of South Africa’s visa regime waiver; the recent issuing of the policy directive to guide the licensing of high-demand broadband spectrum and the introduction of trade measures to safeguard key agricultural and other sectors.

The deputy president also indicated that implementation of the Economic Stimulus and Recovery Plan, launched in 2018 and designed to ignite economic activity, restore investor confidence and create jobs, needed to be speeded up.

As regards land reform, the deputy president confirmed that the process for the identification, profiling and land use assessment of available state-owned agricultural land has been concluded.

“The policy setting out beneficiary selection and land allocation criteria is currently being reviewed and enhanced to ensure fairness, equity and transparency in the redistribution of land.”

The policy will be drawn up by the end of November 2019.

The deputy president also pointed out that the Land Donations Policy to guide processes and transactions involving land donations by companies and non-state institutions will also be concluded by the end of November this year.

An Integrated Producer Support Policy has also been developed to assist with delivery of financial and non-financial support to various producers.

“This model and policy will allow for better coordination and alignment of government efforts and investment decisions to grow and expand the agricultural sector.”

Farmers will also be supported with innovative farming technologies and financial instruments to mitigate the risks posed by natural disasters and climate change.

In terms of stimulating and supporting the development of township and rural enterprises, measures to be undertaken include implementing a special dispensation or set-asides in the awarding of medium- and long-term contracts to small businesses, co-operatives as well as township and village enterprises to allow for a period of incubation and other support to help reduce failure rates; setting up a township and village economy fund to support productive activities and the development of industrial parks, business centres and incubation centres; formalising township and village-based enterprises and dealing with illegal trading via better regulation and implementation of by-laws.