The Economic Reconstruction and Recovery Plan (ERRP) tabled by President Cyril Ramaphosa last month provides an opportunity to build a better-structured economy, says South African Institution of Civil Engineering (Saice) CEO Vishaal Lutchman.

Finance Minister Tito Mboweni also focused on the plan when he delivered the Medium-Term Budget Policy Statement (MTBPS) on October 28.

Saice hosted a panel discussion on the economics of infrastructure on October 29 with the aim of establishing how government and business can work together to achieve the goals set out in the plan.

In a statement issued after the event, Lutchman said that, while the term “reconstruction” was usually associated with fixing something that was broken, fixing South Africa’s economy would lead to growth, development and job creation.

Quoting the National Development Plan 2030, he said that what South Africa did, and how the country did it, was just as important as what South Africa wanted to achieve.

As an example, Lutchman said civil engineers played a crucial role in this recovery and that, from a Saice perspective, the organisation wanted to be a part of the reconstruction. “We want to rebuild our infrastructure, our society and our nation, but we are finding it hard to connect skilled individuals with the work at hand.”

In addition, he asked for input about Mboweni’s MTBPS with regard to putting all South Africa’s efforts into implementing the ERRP, which Lutchman said could accelerate economic growth to 3% or more.

“This will secure fiscal sustainability and build this economy better than before.”

Another panellist who participated in the Saice discussion, Cannon Asset Managers CEO and founder and GIBS professor Adrian Saville, said that, from a macroeconomic perspective, government policy had, since the 1990s, aimed for 5% growth.

“However, in 20 years, our delivery has been lower, with deep social and economic impacts. Covid-19 has certainly played a part in this, but we cannot actually attribute our current state to the pandemic alone.”

He said the moderated 3% growth could be achievable through gross domestic fixed investment (GDFI), but hastened to add that GDFI was challenged by South Africa’s savings rate having fallen from 15% to 10% since the pandemic started.

Commenting on the ERRP, panellist National Planning Commission commissioner Miriam Altman said there was no doubt that the plan’s infrastructure focus was the “right one”.

She noted: “We all agree on it, and we want to do it, so what is going wrong? We cannot just talk about the list of projects we want implemented. “The capacity to deliver is the number one thing we need to be talking about. A 3% increase is somewhat ambitious, but if we focus on capacity, we can create the conditions for growth. We have the power to change our gross domestic product ratio.”

In response, Lutchman noted that, often, development plans felt like “teasers” with false hope of development.

During the discussion, he had asked panellists what would need to happen to translate plans into reality, to which they responded that a more modest goal would set South Africa up to succeed and would have positive knock-on effects to get the plan into action.

“Three per cent is not a great number – government may be overestimating,” said Altman, adding, however, that it was still within South Africa’s power to achieve it by focusing on a few top-priority projects.

She urged stakeholders to ensure the barriers to project implementation were addressed.

“We need distributed capability, down to the ground, to be able to implement. We need to strengthen municipal capabilities and key State-owned entities that deliver infrastructure. That is the only way we are going to do this.”