On Wednesday, the newly re-appointed South African Finance Minister, Pravin Gordhan delivered the much-anticipated 2016 budget speech in Parliament, where he unpacked a strategy for an economic turn-around to avoid ‘junk’ status.
When introducing the revised National development plan, Gordhan stressed that initiatives focusing on skills and training, sustainable growth and infrastructure development were of top priority.
He commended Energy Minister, Tina Joemat-Pettersson for her efforts with the renewables programme and in expanding the Independent Power Producer Procurement Programme (IPPPP), to include coal and gas. The renewables programme has brought in ZAR194 billion ($12 billion) to date.
He further applauded her on her involvement with the preparatory work for investment in nuclear power.
According to Gordhan, the energy sector will see an investment amounting to ZAR70 billion ($4 billion) in 2016, reaching over ZAR180 billion ($12 billion) over the next three years, “as construction of the Medupi, Kusile and Ingula power plants is completed.”
National turnaround plan
[quote]During the State of the Nation Address earlier this month, President Jacob Zuma, said that part of the National turnaround plan, and touching on last year’s Nine Point Plan, was to seek viable resolutions to the current energy challenge.
“Progress has been made to stabilise the electricity supply. There has been no load shedding since August last year which has brought relief for both households and industry alike,” Zuma said.
He added: “Government has invested ZAR83 billion [$5 billion] in Eskom which has enabled the utility to continue investing in Medupi and Kusile, while continuing with a diligent maintenance programme.
“Additional units from Ingula power station will be connected in 2017, even though some of them will begin synchronisation this year.”
Highlighting strengths for investment
Announcing that the New Development Bank will open its Africa Regional Centre in Johannesburg next month, Gordhan expressed his optimism around the country’s institutional foundations, which he believes have “remained resilient.”
- “Our banks and financial institutions are well-capitalised, and we have liquid rand-denominated debt markets,
- The architecture of our Constitution, justice system, public and private law and dispute resolution mechanisms is robust,
- We have excellent universities and research centres,
- We have a strong private sector, and
- We are a resourceful people”
The minister said that the more inclusive the economy, the greater the scope for growth—this can be directed at the manufacturing of power infrastructure locally.
“Special economic zones and employment-intensive sectors with export potential have been prioritised for support by the Industrial Development Corporation,” the minister said.
He added: “Building on the Phakisa oceans economy initiative, a ZAR9 billion investment in rig repair and maintenance facilities at Saldanha Bay is planned, and work has begun on a new gas terminal and oil and ship repair facilities at Durban.”
Gordhan stressed that the driving of the local manufacturing sector, among others, is key to boosting the National economy, and must be extended to include regional forums and other stakeholders.