South African President Jacob Zuma is scheduled to deliver his State of the Nation Address on February 11, 2016. File picture: Dumisani Sibeko, Independent Media


#SONA2016 In the past, President Jacob Zuma’s State of the Nation Address (SONA) has never been a market-moving event, but when he steps up to the podium on Thursday evening, he will be facing a crisis of confidence that needs to be addressed.

That makes this one of the most anticipated speeches from the president, as many investors will look to the SONA to gauge the political and economic future of the country, and whether a credit rating downgrade can be averted.

Read: 'SA needs bold plan to deal with economy'

As usual, it is expected that the president will adopt an optimistic and populist tone in his speech.

This address will probably be more political in nature than previous iterations due to the municipal elections that will take place later this year, and he will try to appease all and sundry.

However, the SONA is normally not the platform where policy changes are announced. For this reason, many investors will end up viewing the speech as a damp squib.

Two key points to watch out for, however, will be detail on the government’s nuclear ambitions, and strategy regarding the struggling state-owned enterprises.

Despite its importance, Zuma’s SONA will probably be overshadowed by Finance Minister Pravin Gordhan’s budget speech later this month.

The budget speech will provide proof of whether the government is serious about tackling structural issues, and whether the talk can actually be walked.

* Francois van der Merwe is the head of offshore investments at Novare.

** The views expressed here do not necessarily reflect those of Independent Media.

*** Be sure to follow #Budget2016 developments on Business Report as we bring you news, reviews, analysis and opinion regarding Finance Minister Pravin Gordhan's speech on February 24. Independent Media is also the media partner for this year's post-Budget breakfast and we'll be bringing you the inside scoop on February 25 and 26.