Unpacking SONA 2019 | by Kate Ferreira

Kate Ferreira 2Last week President Cyril Ramaphosa delivered his second State of the Nation address (SONA) – a speech that was largely focused on improving the economy and upping the state’s efforts to combat corruption. It was presented during a joint sitting of the two Houses of Parliament (National Assembly and National Council of Provinces) on 7 February 2019 at 19h00, and the theme for this year’s address was: “Following up on our commitments: Making Your Future Work Better”.

In the media, SONA was characterised as a “workhorse’s speech” and reception was largely positive, although commentators will be waiting for critical detail to emerge from the forthcoming Budget Speech.

In the news
Unlike previous SONAs, the parliamentary proceedings were largely civil and without much incident. There was a convivial feel, with the president joking with members of opposition parties. The matter that grabbed many headlines was the surprising announcement of the discovery of gas-condensate by Total – discovered off the coast of Mossel Bay, at its Brulpadda block in the Outeniqua Basin. The president called this as a game-changer that could have substantial implications for South Africa’s energy security. The find was also announced independently and earlier in the day by Total. "We congratulate Total and its various partners, and wish them well in their endeavours. Government will continue to develop legislation for the sector so that it is properly regulated for the interests of all concerned," Ramaphosa said.

Progress made, and halted

Ramaphosa took time in his address to reflect and direct. “We must spend this year, the 25th anniversary of our freedom, asking ourselves whether we have built a society in which all South Africans equally and without exception enjoy their inalienable rights to life, dignity and liberty,” he said.

“A year ago, we set out on a path of growth and renewal. Emerging from a period of uncertainty and a loss of confidence and trust, we resolved to break with all that divides us, to embrace all that unites us. We resolved to cure our country of the corrosive effects of corruption and to restore the integrity of our institutions. We resolved to advance the values of our Constitution and to once again place at the centre of our national agenda the needs of the poor, unemployed, marginalised and dispossessed,” he continued.

Pursuing job growth
Then Ramaphosa reported back on initiatives promised in the preceding speech, including the Presidential Jobs Summit, which he claims resulted in concrete agreements between organised labour, business, community and government to create 275,000 additional direct jobs every year.

In terms of youth employment, Ramaphosa said government was focusing was attention, policies and programmes on “key parts of the economy that are labour intensive”, including agriculture, tourism (targeting 21 million tourists a year by 2030, compared to 10 million in 2018), and the “Oceans Economy”.

“Since Operation Phakisa on the Oceans Economy in 2014, we have secured investments of nearly R30 billion and created over 7,000 direct jobs. The investments have been mainly in infrastructure development, marine manufacturing, aquaculture, and the oil and gas sector.
Expected investment in the Oceans Economy over the next five years is estimated at R3,8 billion by government and R65 billion by the private sector. These investments are expected to create over 100,000 direct jobs and more than 250,000 indirect jobs,” he promised.

Trading up
Other initiatives promised were an increased focus on African and regional markets for exports, such as further development of special economic zones (“dedicated to producing specific types of products, such as clothing and textiles, for example”), and the establishment of African Continental Free Trade Area (ACFTA).

“Alongside a focus on exports, we will pursue measures to increase local demand through, among other things, increasing the proportion of local goods and services procured both by government and the private sector. Increasing local demand, and reducing the consumption of imports, is important because it increases the opportunities for producers within South Africa to serve a growing market. Through this, we will intensify the ‘Buy South Africa’ programme.”

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Incubation boost

In his speech, Ramaphosa argued that, given the “key role that small businesses play in stimulating economic activity and employment – and in advancing broad-based empowerment”, renewed focus will be given to expanding the Small Business Incubation Programme, which provides entrepreneurs with “physical space, infrastructure and shared services, access to specialised knowledge, market linkages, training in the use of new technologies, and access to finance.

The incubation programme currently consists of a network of 51 technology business incubators, 10 enterprise supplier development incubators and 14 rapid youth incubators.

The state of SOEs
The president also specifically addressed the various failings of state-owned enterprises in which “mismanagement and corruption had severely undermined […] effectiveness”. This included the promise of restructuring Eskom, the full details of which are expected in the Budget Speech.

He promised that government was committed to restoring faith in institutions like the National Prosecuting Authority (NPA), the South African Revenue Service (SARS), the State Security Agency and the South African Police Service (SAPS).

“We have appointed a new National Director of Public Prosecutions (NDPP), Advocate Shamila Batohi, to lead the revival of the NPA and to strengthen our fight against crime and corruption. We are implementing the recommendations of the report of the Nugent Commission of Inquiry into SARS and are in the process of appointing a new Commissioner to head this essential institution,” he explained.

Kate Ferreira is the Contributing Editor of Bespoke Bulletin - www.bespoke.co.za

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Posted on February 13, 2019