JOHANNESBURG, Sept. 21 (Xinhua) -- South African President Cyril Ramaphosa's new stimulus and recovery package would boost the mining, tourism and infrastructure industries, said Lumkile Mondi, a senior lecturer at the school of business and economics at Wits university.
The recovery plan which Ramaphosa unveiled in Pretoria on Friday consists of five measures which would see the implementation of economic growth reforms, reprioritizing public spending and tackling health and education challenges.
Ramaphosa revealed that the government would establish a R400 billion (about 278.5 billion U.S. dollars) infrastructure fund.
He stated that infrastructure spending would be at the heart of the plan, even though more details on this would be revealed in October during the medium term budget.
"In total, the plan will result reprioritizing expenditure and new project level funding of around R50billion (3.48 billion U.S. dollars). The stimulus and recovery plan prioritizes infrastructure spending as a critical driver of the economy activity and infrastructure expansion. This has a potential to create jobs on a large scale and attract investment," he said.
"Basically, the recovery plan says a lot to investors that South Africa is open for business," said Mondi.
"We are open to the rule of law, but more importantly we need you to work with us. That positive message has reverberated across the world. This says we've got a government that is committed to economics and development," said Mondi.
"We have new hope specifically around the tourism and mining sectors," said Mondi.
"The mining sector was nearly destroyed. The plan is going forward about the infrastructure fund that will enable our economy and unlock a lot of bottlenecks which prevail. The intervention around agriculture are very encouraging given the fact that we are embarking on a land reform program," Mondi told Xinhua.
The rand has firmed 0.65 percent to R14.19 to the U.S. dollar following the release of Ramaphosa's economic stimulus package.
The announcement came after the economy slipped into a technical recession when the Gross Domestic Product (GDP) declined by 0.7 percent and 2.6 percent during the second and first quarter of 2018 respectively.
The last time the economy was in recession was in 2009.
