Associated Press

President Jacob Zuma (centre, at the podium) delivers his State of the Nation address during the opening of Parliament in Cape Town.

The 2012 State of the Nation address theme was resoundingly focused on infrastructure development.

This has been taken as a negative by some analysts, saying that the speech was pedestrian and not inspirational enough. There was an expectation from some people that – this year being an election year for the ANC, as well as a centenary one – a more emotion-rousing speech would be in order. I have a different view.

The economy has been the main topic for most governments in recent weeks. German Chancellor Angela Merkel delivered the opening address at Davos which focused on the economy. US President Barack Obama’s State of the Nation address equally looked at the economy. This is the most pressing thought on most leader’s minds around the world.

The European debt crisis has a cascading effect on their economic partners and their respective capital markets. So any leader worth his salt will give serious consideration to the spill-over effect of the debt crisis on his country and try to find ways to manage those effects.

Furthermore at the Mining Indaba, the investors, both locally and offshore, were quite keen to get an indication of the focus of the South African government on an array of issues which included infrastructure development as one of the priority items on their list.

So President Jacob Zuma’s focus on infrastructure development was spot-on. The issues of inspiration and ANC elective conference require a different platform than the State of the Nation address.

Most people are affected by the constantly changing economic conditions that the country will be facing going forward and this creates a level of angst and uncertainty for them. Therefore, focus on the economy brings some comfort that something concrete is being done to bring about economic stability.

The infrastructure projects that were outlined are a step in the right direction. However, there are leadership and procedural challenges facing the implementation of the infrastructure projects.

The seamless co-ordination that is required between the players in the infrastructure game is quite intricate and very politicised. This means that it is inevitable that some balls will be dropped but hopefully there will be useful lessons that emerge from the experience.

The current Presidential Infrastructure Co-ordinating Commission (PICC) may minimise mistakes by making sure that the different infrastructure stakeholders within the government are represented.

The role that state-owned entities are going to play in infrastructure development is crucial because they are the only players that operate on private sector principles while fulfilling the social obligations set out by the government.

The funding of such projects given the funding climate around the world will be a challenge. The negative outlook from some credit rating agencies on South Africa’s debt is potentially going to increase the cost of our debt. This means our capacity to spend on other areas of government requiring service delivery will be impaired.

The sentiments voiced by the ANC Youth League on nationalisation has cost the country in real terms through the rating downgrade, as well as the opportunity cost of potential investments that would have been made but ended up being diverted elsewhere.

The Gauteng e-tolling debacle and its handling is also sending negative sentiment about the ability of some of our state-owned entities to handle the infrastructure funding process without glitches.

This might not be really applicable to all our infrastructure projects, but the first impressions for some investors represent indelible reality for them, which can have negative results. So unambiguous messages from the PICC about how infrastructure projects are funded will go a long way in easing investor fears. The reality is that South Africa has successfully used sound funding models that worked for infrastructure projects such as the N3 toll road and Gautrain among others, and we need to showcase that to investors.

So overall, the president’s speech was an improvement from previous years and gave a solid view of what we need to expect on the infrastructure front. - Vuyo Jack