PRESIDENT Cyril Ramaphosa will have to clear a laundry list of demands as he delivers his State of the Nation Address (Sona) tonight, setting out the government’s plans for the year ahead and with pressure on him to rev the economy by strengthening structural reforms, amid rising unemployment and an ongoing energy crisis.
“The State of the Nation Address is an opportunity for the president to take stock of challenges faced by the nation, but also of progress made,” the Presidency said yesterday.
However, Investec chief economist Annabel Bishop was not as optimistic about Sona’s prospects to stimulate a direction towards economic growth.
“The Sona is expected to show little difference in content to prior years, with insufficient reform implementation to drive economic growth past 2 percent this year, load shedding still a key risk and heavy debt and cost pressures on Eskom,” Bishop said.
Unemployment has become this country’s Achilles heel, with 12.4 million people without jobs, as the economy is reeling from the impact of the July civil unrest and multiple levels of Covid-19 lockdowns.
Ramaphosa will also have to show that the government is on top of electricity supply challenges to restore investor and business confidence after Eskom last week implemented this year’s first rotational power cuts.
The business sector yesterday called for a clear implementation strategy on how the government plans to address the current energy crisis that has been ongoing for 14 years.
Business Leadership SA CEO Busi Mavuso said Ramaphosa should crank up action over energy supply.
“We need bold action to end all uncertainty regarding our energy future, and Ramaphosa has the perfect opportunity to shock the markets in a positive way,” Mavuso said. “Without certainty of energy supply at competitive pricing, higher levels of economic growth and job creation are only a dream.”
The government’s intervention to raise the limit for self-generation by private companies from 10MW to 100MW has been hailed as the right policy path, but will take at least two years to start bearing fruit.
Business Unity SA CEO Cas Coovadia said there was an urgent need for structural economic reforms, policy certainty and interventions to improve the ease of doing business.
“Although Covid-19 has intensified the situation, the fundamental challenge is the failure to achieve rapid enough economic growth over the past decade, itself a feature of our failure to implement long-needed structural reforms,” Coovadia said.
Drastic measures are required to address and begin reversing the jobless rate in South Africa, with various industries – including informal traders – hit the hardest by lockdown restrictions and supply-chain disruptions.
South African Institution of Civil Engineering CEO Vishaal Lutchman said for the Sona, he envisioned a “going back to basics” where employment was made a priority within the sector.
“The slow or stagnant awarding of projects is creating structural unemployment. It is estimated that up to 20 civil engineers leave our country every month in search of greener pastures where there is a more reliable stream of projects. We cannot afford this draining of expertise.”
Proudly South African CEO Eustace Mashimbye said job creation must feature prominently in Ramaphosa’s speech – beginning with rallying the country behind local businesses, especially small, medium enterprises and industrialists.
The Citrus Growers’ Association (CGA) also called on Ramaphosa to provide an update on the plan to address the challenges at the ports ahead of the upcoming citrus export season. CGA CEO Justin Chadwick said that government must prioritise an immediate improvement at the ports’ container terminals and managing reefer capacity.
“These steps must be prioritised and realised as a matter of urgency in the months to come, not only to avoid a repeat of 2021, but also to prevent shipping lines increasingly bypassing South African ports, which not only robs growers of the opportunity to access all markets but also puts the entire economy at risk,” Chadwick said.
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