Ina Opperman
Business Journalist
6 minute read
11 Feb 2022
3:44 pm

Let’s see if Ramaphosa sticks to his Sona deadlines – economists

Ina Opperman

There was more of what we needed in the Sona speech than in the President’s other speeches, says Independent economist Mike Schűssler.

Picture: Parliament of South Africa/Twitter

Let’s see if President Cyril Ramaphosa sticks to his Sona deadlines, economists said today after his State of the Nation Address (Sona) in Cape Town on Thursday night. They all felt that his speech was far too long, but that it was worth listening to.

Saying that the country is in a battle for its soul touched a nerve for many South Africans, but prof. Jannie Rossouw, visiting professor at the Wits Business School, says the President missed a wonderful symbolic opportunity to walk out on the balcony of the City Hall and stand next to the statue of former president Nelson Mandela, where he stood holding the microphone for his first speech after he was released.

ALSO READ: We’re engaged in the battle for the soul of the country’ – Ramaphosa

Positive moves in Sona

Rossouw says it is a positive move to start a unit to investigate removing the red tape involved in starting a business, but he finds it strange that it will be in the Presidency and not in the department of small business development, probably because it has been so ineffective so far.

“It could a better idea to close the department and use the money saved to help people start small businesses.”

He also likes that the President gave deadlines for a whole lot of things that will be done this year and hopes that he will be able to deliver on his promises.

Prof. Bonke Dumisa, independent economist, says although the President said many things that he has said before, it was worth it to listen to him speak.

“There were some good takeaways, such as steps to do something about the scrap metal industry that causes so many problems in the country, as well as the unit that will deal with red tape that affects the ease of starting a business.”

ALSO READ: Sona 2022: Former Exxaro CEO to tackle government red tape

Red tape unit

However, he was also puzzled by the decision to keep this unit in the Presidency and not in the department of trade and industry where he thinks it should be.

“In any way, I hope that the unit will have a clear mandate about what should be done, because we still need business regulation. I hope everything the president promised will be done.”

Independent economist Mike Schűssler says there was more of what we needed in the speech than in his other speeches.

“He started with more reality in his outlook and acknowledged that businesses have to create jobs. He was all in all a far more pragmatic, but like everyone else, we need implementation.”

He pointed out that holding a conference is not implementation of a programme. “Arrests are, building road or bridges or schools would be. Getting more power and dropping of regulations are. We cannot wait too long, but it is great news that reality has started to emerge from smart cities and fast trains. We are back to the real stuff.”

ALSO READ: Sona 2022: Ramaphosa’s new ‘social compact’ to create jobs and build economy

Sona speech worth more than paper it is written on

Economic research group Oxford Economics also said it has been a long time since a South African president delivered a Sona worth more than the paper it is written on.

“Granted, expectations were very low and the national mood even lower, but this Sona stood out as more than the usual rhetoric and hollow chest beating.”

The group noticed an encouraging nod to the private sector, a mild rebuke of underperforming departments, a few novel announcements and a couple of subtle jabs aimed at his opponents in the ANC, such as reminding Tourism Minister Lindiwe Sisulu that the country had the “best Constitution in the world.”

Although the President mentioned the new social compact in 2019 already, he promised this time to have it finalised in 100 days.

“There was continuity as well, with a nod to the priorities laid out in last year’s Sona to beat the pandemic, invest in infrastructure and local production, job creation and solving the energy crisis.“

Unsurprisingly, the President spent a lot of time on energy matters, correctly identifying the country’s energy shortfall of some 4,000 MW of electricity as one of the greatest threats to economic and social progress, the group noted although little of his update on the initiatives to address the shortfall was new information or cause for optimism.

ALSO READ: Basic income grant: Civil society organisations accuse Ramaphosa of failing

Deadlines

The group also said the President should be lauded for putting deadlines to some of the plans, such as third-party access to the freight rail network by April and private-sector partnerships at the Durban and Ngqura container terminals by October.

“The appointment of outsiders Mavuso Msimang, Sipho Nkosi and Daniel Mminele to effectively do the jobs of ministers regarding visa reform, reducing red tape and addressing climate change, is frustrating and increasingly bizarre, but it is simultaneously encouraging as breakthroughs are needed and his Cabinet is evidently not up to the task,” the group says.

Wayne Duvenage from Outa also says the Sona was ‘high’ on good intent but lacking in delivery and wonders if the promises of action against state capture be built into Budget 2022.

“The President’s action plan to parliament on cleaning up state capture must ensure that necessary resources and expertise are injected into prosecutions. We are tired of promises of future action.”

ALSO READ: Sona 22: Ramaphosa says govt intends to end national state of disaster

Most important in Sona

He believes that the President’s undertaking of action against state capture and Cabinet failures on national security were the most important part of Sona 2022, as rapid and significant delivery on these promises will instil public confidence, as accountability is long overdue on these matters.

Although the President made a strong plea for unity from business and civil society to rebuild the economy and introduce efficiency within state departments, Duvenage says there is a clear reluctance by many state departments to engage with organised civil society, such as suggestions to introduce efficiencies such as driver’s licence extensions and AARTO’s unworkable processes.

He would have liked to hear about a pending policy statement to instruct government at all levels to purchase only vehicles manufactured in South Africa.

“Outa would have liked to hear the president announce that parliament will be persuaded to pass new legislation that all SOE and state institution boards should contain at least one (possibly more) civil society representatives and that ministers should not have the sole powers in these appointments.”

The focus now shifts to Finance Minister Enoch Godongwana who will deliver his maiden Budget Speech on February 23 with little fiscal manoeuvring space and more demands on the public purse than ever.