‘No reassurance for business’

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ZumaSONA1 Reuters. South African President Jacob Zuma delivers his State of the Nation address at Parliament in Cape Town, June 17, 2014. Zuma put the need to boost economic growth at the center of the first major policy speech of his second term on Tuesday, saying he hoped to lift annual growth to 5 percent by 2019.

Johannesburg - President Jacob Zuma lost an ideal opportunity to reassure the business community on how he planned to address its economic concerns.

“Sacci is pleased that President Zuma touched on several urgent concerns of the business community, but an ideal opportunity was lost to give stronger direction on these issues and in so doing reassure investors and rating agencies,” SA Chamber of Commerce and Industry (Sacci) chief executive Neren Rau said in a statement on Wednesday.

“It is necessary to provide insights on how government will address these concerns, as merely mentioning them is not adding anything to the debate.”

Rau said some of the obstacles involved in doing business in South Africa were the business community's lack of involvement in the National Infrastructure Plan, an increase in skilled graduates and artisan training, a review of the labour relations framework, as well as problems in the energy sector.

Zuma had announced the reconvening of the presidential business working group, to address the obstacles in doing business, on Tuesday night during his state-of-the-nation address.

Rau said there had been little progress about the matter in Zuma's previous term.

“Clarity on timelines and outcomes of the working group processes are essential to maintain the momentum of the process.”

Plans to drive the National Infrastructure Plan under the presidential infrastructure co-ordination committee were also noted during the address.

Rau said the critical question remained “how business can support or participate on this massive construction programme?”

He said the proposal to increase university enrolment from 172,000 to 250,000 by 2019 should be complemented by the appropriate skilling of graduates.

“The focus on university enrolments must also be balanced with greater levels of artisan training.”

The proposals made by Zuma contained the right sentiments that the economy must take centre stage and obstacles to economic growth must be removed, he said. But it was not clear how the obstacles would be overcome.

Zuma acknowledged that industrial action was plagued with violence and open-ended timelines.

Government was urged to drive a review of the labour relations framework by engaging with social partners.

Zuma announced that government was considering a national minimum wage as one of the key mechanisms to reduce income inequality.

“The exploration of a national minimum wage is misplaced since bargaining councils are already tasked to balance workers' demands and business realities,” Rau said.

Sacci welcomed Zuma's comments on problems in the energy sector, the emphasis on the need for radical transformation to develop sustainable energy as well as the assurance that shale-gas and nuclear energy would be considered.

Rau warned that although fast-tracking procurement and delivery in the energy sector was vital, the country should not compromise corruption safeguards.

“In addition, Sacci members have also raised their concern regarding high municipal electricity tariffs and the practice of cross-subsidisation.” - Sapa



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