‘No quick fixes:’ Ramaphosa on COVID-19 job losses, declining investments

President Cyril Ramaphosa has warned that there are no quick fixes to the economic impact of the COVID-19 pandemic.

In his weekly newsletter on Monday, Ramaphosa urged South Africans to be realistic about how long it would take for South Africa’s economy to recover.

He wrote, “There are tough times ahead. There are no quick-fixes and we have to be realistic about our prospects, especially about the time it will take for our economy to recover. Even the advanced economies will contract substantially because of COVID-19 and it will take a long time for economic output to return to pre-pandemic levels.”

Job losses

Last week, a number of major companies, such as fashion retailer Edcon, SA Broadcasting Corporation (SABC) and mobile operator Cell C, announced plans to retrench employees.

Ramaphosa said this is evidence that predictions of job losses and business shutdowns caused by the pandemic are beginning to materialise. However, he urged companies to strike a balance between business sustainability and jobs.

He said, “We would urge that the difficult decisions to be taken are taken with care and with due regard to balancing the sustainability of companies and the livelihoods of workers. It is important that whatever is done is underpinned by ensuring a just transition to all concerned.
 
“The measures we put in place to protect local businesses during the lockdown in the form of loans, tax relief, debt restructuring, extended credit lines and retail rental exemptions are continuing to provide vital support.”

The President nevertheless welcomed global online retailer Amazon’s announcement last week that it is creating 3,000 new jobs in South Africa.

He said the government will seek to create more jobs through infrastructure projects. He is scheduled to deliver the keynote address at the inaugural Sustainable Infrastructure Development Symposium of South Africa on Tuesday (23 June).

“The job creation efforts we began in early 2020, such as the Presidential Youth Employment Intervention, and the existing ones such as the Expanded Public Works Programme and Community Works Programme, will be scaled up,” the President said.

Investments

Ramaphosa also urged local and multinational companies that made investment commitments before the pandemic to honour those commitments as much as possible.

He said, “In the past two years the business community has made commitments to invest in various businesses in our country. It is our hope that our business community and international investors will honour the investment commitments made in a number of forums such as the South Africa Investment Conference.
 
“Coronavirus has resulted in companies around the world re-evaluating their investment and expansion plans, and we must anticipate that some of these commitments may be scaled back and even cancelled. South Africa still has great investment opportunities and assets to invest in.”

In 2018, Ramaphosa began a drive to raise more than R1 trillion in investments over a period of five years. The first investment conference in 2018 raised R290 billion worth of commitments, followed by R363 billion last year.

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