President Cyril Ramaphosa will need more than just hyperbole to persuade ratings agencies against downgrading South Africa to junk status when he delivers this year’s State of the Nation Address.
With the economy on a downward spiral and state-owned entities in paralysis, political analysts who spoke to News24 say this year’s Sona might be Ramaphosa’s most crucial one yet.
The two political analysts say the president needs to strongly demonstrate that serious action has been taken in relation to the economy.
University of Johannesburg politics professor Mcebisi Ndletyana believes that Ramaphosa’s Sona address will focus mainly on problems related to consolidation of SOEs, to ease the drain on the fiscus.
To show fiscal discipline, Ndletyana says Ramaphosa will have to indicate how he can further curb excessive government expenditure in relation to public service.
“What we might need to credit him on is getting Cosatu on board with regards privatising certain SOEs, especially the non-strategic [elements]. The elephant that will be in the room is South African Airways (SAA). He will have to say how he is going to get more money for SAA. That forms a key part of the assuring message to rating agencies.”
SAA was placed under business rescue in December, in a bid to help restructure the ailing state-owned entity. In a decision which shocked government, the business rescue practitioners’ cancelled certain domestic and international routes, saying that it was done in the best interests of the airline.
Earlier this week, Mineral Resources Minister Gwede Mantashe stunned alliance partners in the SACP when he said that the beleaguered SAA should be sold to private buyers if it can’t make a profit.
Political analysts Ongama Mtimka, who echoed Ndletyana’s sentiment, added that Ramaphosa and his administration have been found wanting when the need arises to gain momentum from small victories.
Mtimka said Ramaphosa must understand that South Africans want to believe in messages that indicate the country is taking the right steps, mainly around managing state capacity, the ability to stimulate shared economic growth, and the ability to manage the various socio-economic crisis.
“The source of my despair currently is that, while it has become clearer and clearer that the crisis – which can be partly linked to state capture – is continuing, there hasn’t been a sense that there is momentum building towards a positive outlook in the country, in many respects.
“If the focus is on doing what’s right for the country, ratings agencies take care of themselves. The challenge with focusing on a particular messaging and not getting things right is the propensity to be creative with the truth and you can only sustain positive messaging until the next crisis comes out in the open.”
Mtimka added that Ramaphosa had lost out on good public relations sentiment.
“The hype that is created about launches of district development models only last for as long as it’s in newspaper headlines. Beyond that, lived experiences start kicking in. For me, I really would love to see where promises are made… [which] of those have been implemented.”