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Economy takes centre stage at SONA

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IOL pic jun18 sona jacob zuma smile

Reuters

President Jacob Zuma. Picture: Sumaya Hisham

Cape Town -

The country’s fragile economy took centre stage on Tuesday night as President Jacob Zuma delivered his seventh State of the Nation address, promising “far-reaching interventions” following damaging labour unrest and economic downgrades in recent weeks.

“As we enter the second phase of our transition from apartheid to a national democratic society, we have to embark on radical socio-economic transformation to push back the triple challenges (of inequality, poverty and unemployment). Change will not come about without some far-reaching interventions. The economy takes centre stage in this programme,” said Zuma.

He said it remained the government’s strong belief that the most effective weapon in the campaign against poverty was the creation of decent work.

“And that creating work requires faster economic growth. We have set a growth target of 5 percent by 2019. To achieve this, we will embark on various measures and interventions to jump-start the economy.

“We have set this target during a difficult period. The economy has grown below its potential over the last three years and many households are going through difficulties,” Zuma said.

In the run-up to the address, analysts had called on the president to focus on the economy following the almost 20-week strike in the platinum belt and the recent economic downgrades by rating agencies.

Addressing the first joint sitting of Parliament since his re-election, Zuma carried on where he left off at his inauguration where he promised a “radical” second phase of the democratic transition which would entail “radical economic transformation”.

Zuma used his inauguration last month to outline his to-do list, but gave little detail other than stating that the next five years would be centred on implementation of the 2030 Vision document, the National Development Plan. While not fully accepted by the alliance partners, the NDP represents the ANC’s mission for a “radical second phase” of the transition from apartheid.

Zuma turned his focus to energy problems. The Grand Inga Hydropower Dam in the Democratic Republic of Congo, the state’s mooted nuclear energy build programme, and the controversial shale gas find in the Karoo were highlighted as the major energy plans for the next five years.

He warned that embattled energy provider Eskom and other parastatals would have to adapt quickly to support the plans. “To achieve our energy security goals, state-owned companies involved in the energy sector, such as Eskom, South African Nuclear Energy Corporation and the Central Energy Fund, will have to adapt to the redefined roles to achieve these objectives.”

With an eye to local government polls in 2016, Zuma shed some light on the government’s plan of action to “revitalise” local government, hit by scores of service delivery protests in the run-up to the elections.

“We would like our people’s experience of local government to be a pleasant one. We have listened to the complaints and proposals of South Africans over the past five years, relating to the performance of municipalities.”

South Africa’s economic performance is dogged by worsening labour relations, and Zuma called on “social partners” to meet urgently to find solutions. He identified inequality, particularly in wages and income, as a key factor in “untenable” labour relations and announced direct initiatives to deal with the problem:

* The government will investigate the possibility of a national minimum wage to reduce income inequality.

* Deputy President Cyril Ramaphosa will convene a “social partners dialogue” within the ambit of the National Economic Development and Labour Council.

* The establishment of an inter-ministerial task team on service delivery to be led by Co-operative Governance and Traditional Affairs Minister Pravin Gordhan.

* Implementation of the Framework Agreement for a Sustainable Mining Industry entered into by labour, business and government last year. This process will now be led by the president himself, he said.

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