Property executives had mixed reactions to President Cyril Ramaphosa’s SONA, with some impressed with the rising fixed investment and strides on infrastructure, while others said the address was lacking in policy implementation. Picture: James White
Property executives had mixed reactions to President Cyril Ramaphosa’s SONA, with some impressed with the rising fixed investment and strides on infrastructure, while others said the address was lacking in policy implementation. Picture: James White

Property executives welcome municipal power reforms in SONA

By Edward West Time of article published Feb 15, 2021

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CAPE TOWN - PROPERTY executives had mixed reactions to President Cyril Ramaphosa’s SONA, with some impressed with the rising fixed investment and strides on infrastructure, while others said the address was lacking in policy implementation.

Chas Everitt International chief executive Berry Everitt said the most welcome news for millions of people was the extension of the Covid-19 social grant for three months and the extension of the Ters benefit for employees in sectors that had not been able to operate at all due to the pandemic.

“This is necessary to alleviate the extreme poverty in which many South Africans find themselves – and will continue to experience unless we open the economy, attract investment, increase GDP and create large numbers of jobs,” he said.

He said the next most important information in the speech was the progress on obtaining and distributing sufficient vaccine doses.

This would allow the government to shift attention and more resources to the Economic Reconstruction and Recovery Plan (ERRP) created last year.

“It was encouraging how far implementation of the ERRP has gone, especially with regard to the reconstruction of basic infrastructure, expansion of digital access, the creation of large new human settlements – including the new Smart City near Lanseria – and efforts to support local production and manufacturing,” said Everitt.

He described as impressive that Ramaphosa’s annual investment conferences had attracted almost R774 billion of a five-year target of R1.2 trillion.

“This indicates South Africa is still an attractive investment option in global terms, and that there is still positive sentiment among both local and foreign companies, despite the economic setbacks of the past few years,” said Everitt.

He said SONA made it clear the pandemic had resulted in a closer understanding between government, business, labour and civil society organisations and this was already paying off in a number of way, such as in the restructuring of Eskom, fast tracking of alternative energy supply, the use of technology to improve the ease of doing business, and immigration requirements for skilled workers reforms.

“Steps being taken to recapacitate the many dysfunctional local governments with properly qualified employees and amendments to the Electricity Regulation Act to allow municipalities to produce or procure their own electricity, are also most welcome benefits of this new alliance,” said Everitt.

Lew Geffen Sotherby’s International Realty chief executive Yael Geffen said they needed to hear a detailed plan for economic recovery, but much of Ramaphosa’s speech might as well have been a copy and paste of last year’s SONA and the one delivered the year before.

“We are still without electricity, government corruption is rampant and the private sector is imploding.The government has been singing from the same hymn sheet for years without offering tangible results,” he said.

He said Ramaphosa had laid the bulk of responsibility for job creation this year at the door of the private sector, which did not have the capacity in the current economic climate to step up to the plate.

“Current government policies are largely punitive and further diminish the private sector’s capacity to contribute to growth,” he said.

Realnet managing director Gerhard Kotzé said, however, the speech had outlined some practical responses to the economic devastation and employment loss that had been brought about by the Covid-19 pandemic.

Between 1.7 million and 2.2 milliion jobs have been shed in the past year.

“The most critical thing is for the government to manage a vaccine campaign that will enable the economy to open up safely and start recovering and creating jobs as fast as possible. This is the real key to increasing both home ownership and real estate investment, so the most important aspect of the speech from a property perspective was the more positive information about SA’s vaccine plans,” said Kotzé.

He said other stand-outs were the restructuring of Eskom, the announcement that “bid window five” for independent producers of wind and solar power would be opened in days, and that there would be another window later this year.

On plans to allow local authorities to procure or create their own power supplies, he said Stellenbosch and George had already announced plans to do this, and these towns and any others that follow suit would be the “winners” in terms of attracting new residents and new commercial enterprises as the post-Covid trend towards de-urbanisation grows,” said Kotzé.

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