Government support for the National Development Plan (NDP) was underscored last night in President Jacob Zuma’s State of the Nation address. Zuma focused immediately on the plan, reminding his audience that he had received it from the National Planning Commission in August last year.
After Zuma endorsed the NDP at the ANC policy conference in December, rating agency Moody’s Investor Services described the development as credit positive. Moody’s was among three rating agencies to downgrade South Africa’s sovereign credit rating.
The plan aims at creating 11 million jobs by 2030 – a target that would require much higher growth than the economy is currently experiencing.
Zuma acknowledged concerns of the business community. “The [private] sector has indicated that for the economy to grow threefold, we must remove certain obstacles.
“No single force acting individually can achieve the objectives we have set for ourselves. We will engage business, labour and other social partners in pursuit of solutions.”
He addressed another major theme that has been consistently raised by commentators as essential to economic growth: education at primary, secondary and tertiary level.
“All successful societies have one thing in common – they invested in education. Decent salaries and conditions of service will play an important role in attracting, motivating and retaining skilled teachers.
“In this regard, we will establish a Presidential Remuneration Commission, which will investigate the appropriateness of the remuneration and conditions of service provided by the state to all its employees.”
Zuma also outlined progress on the infrastructure development programme he announced last year, naming projects relating to dams and ports, and the improvement of the Saldanha iron ore projects.
He stressed that R47 billion had been spent on renewable energy projects. And he noted that by the end of next month the government would have spent about R860bn on infrastructure since 2009.
However, he failed to follow up on his opening comments relating to the NDP and cynics are likely to wait for further details on implementation before cheering.
The rand moved little during the speech but earlier it strengthened from about R8.9 to R8.8 against the dollar.
While some are looking to the 2013/14 Budget later this month to provide more detail in terms of budget allocations, the president’s endorsement of the plan at the ANC conference in Mangaung in December may have come too late as the Budget is prepared well ahead of its presentation.
Azar Jammine, the chief economist of Econometrix, and Goolam Ballim, the chief economist at Standard Bank, have both pointed out time constraints. Ballim noted recently that the first signs of progress on this score could come only in the medium-term budget policy statement in October, and confirmation would emerge in the 2014/15 Budget next February.
Ballim said at that stage expenditure allocations to different ministries would show how far plans had progressed.
Any feel-good factor generated by the address could be countered if certain government ministers and ANC officials do not cure themselves of foot-in-mouth disease.
In recent weeks investors have been alienated by threats from Mineral Resources Minister Susan Shabangu, ANC secretary general Gwede Mantashe and others.