Cyril Ramaphosa’s new plan for economic growth

South African President Cyril Ramaphosa unveiled the second phase of a reform program aimed at revitalising an economy that’s grown by an average of less than 1% annually over the past decade.

Measures are planned to fix dysfunctional municipalities and drive the adoption of digital technologies.

Operation Vulindlela, a unit established in 2020 that answers to the Presidency and the National Treasury, will oversee the program’s implementation.

Its other new priorities, which the cabinet agreed to in March, include providing lower-income earners with accommodation that will give them better access to economic opportunities.

“Our economy continues to be held back by structural inefficiencies” and must grow much faster to create the jobs the country needs, Ramaphosa told reporters in the capital, Pretoria, on Wednesday. The new measures will “address the binding constraints on growth,” he said.

The program aims to ensure that municipalities appoint capable, qualified people to senior positions, and that those that fail to do so will be penalised.

The municipalities’ institutional structures and funding models will also be reviewed. A digital identity system will be instituted, and people will be able to apply for passports and other documents online.

Ramaphosa said the release of state-owned land and buildings will be accelerated so they can be used for affordable housing, especially in the cities. Regulations impeding development will be reviewed, and investment in urban centres will be incentivised.

The new initiatives’ announcement comes two weeks before Finance Minister Enoch Godongwana is scheduled to present to parliament a third iteration of the national budget, which forecasts lacklustre growth over the next three years.

Two previous budget drafts were scrapped because of differences within the nation’s 10-party ruling coalition over proposed tax increases and other policies.

Operation Vulindlela has already notched up several successes, including helping boost investment in electricity generation projects that have curtailed crippling power shortages, drawing up plans to give private operators access to the country’s freight-rail network, and reforming a byzantine work-permit regime.