The 2020 State of the Nation Address (SoNA) came at “a crucial time” for South Africa, which is faced with a stagnating economy defined by challenges such as lack of capacity in State-owned enterprises (SOEs), high unemployment and electricity supply constraints, a panel agreed on Friday morning at the University of the Witwatersrand Business School (WBS).
President Cyril Ramaphosa on Thursday evening outlined government’s policy framework and the positive impact this could have on the economy in his SoNA.
However, University of Johannesburg Pan-African Institute Professor Mcebisi Ndletyana said that while the President did outline a broad set of steps to take, he had not “taken the necessary decisions and shies away from contentious issues and confrontation”.
He added that in Thursday’s SoNA certain statements could have been made “to keep up appearances”, lamenting that, in the past, the South African government had not always kept its word.
Mapungubwe Institute for Strategic Reflection (Mistra) Professor Susan Booysen, meanwhile, concurred that while the President often showed “signs of being weak” in decision-making, he had nonetheless “compiled and delivered a plan of worth” that displayed “flickers of hope” for South Africa.
The panel, which also included political analyst Dr Ralph Mathekga, overall, agreed that the SoNA placed emphasis on inclusive growth and the need to urgently remove obstacles to structural economic reforms, while simultaneously highlighting the importance of collaboration with the private sector to promote job-rich growth.
In a separate statement on Friday, the South African Chamber of Commerce and Industry (Sacci) welcomed this stance in the SoNA.
However, it said that, while the announced plans indicate “a level of seriousness” in addressing the short- to medium-term challenges, government should “articulate a very clear long-term vision and plan” for South Africa.
It said that if the country was to move from being a developing economy to a developed economy and, consequently, address the "triple challenges" – poverty, unemployment and inequality – it would “be that long-term plan that should serve as a template for future SoNAs”.
Meanwhile, Business Unity South Africa (Busa) on Friday also released a post-SoNA statement, wherein it highlighted that, in the context of addressing South Africa’s fiscal crisis, a clear statement that public expenditure would be tempered, would be crucial in the upcoming National Budget.
Finance Minister Tito Mboweni will deliver his Budget speech on February 26.
According to North West University Business School economist and Professor Raymond Parsons, the fiscal arithmetic in the Budget would also show whether South Africa was indeed stabilising its public finances, reducing bailouts to dysfunctional SOEs, and winding down its overall debt.
The WBS panel and Busa both lamented that the President had not addressed the SOE crisis decisively.
The general view was that Ramaphosa had talked about rationalising SOEs and ensuring they contribute to growth. Governance, capacity, the possible closure of non-strategic SOEs and political interference were not addressed, however.
Booysen also welcomed the President’s announcement that clear and precise implementation milestones for Cabinet members would be published by the end of February, to ensure delivery and accountability, saying this would be welcomed by South Africa.