Zuma sings familiar song

State of nation address lacking in focus on small business, implementation challenges

President Jacob Zuma's state of the nation address was eagerly anticipated, but did it provide any new hope for economic growth and delivery?

While his emphasis on infrastructure development to grow the economy and employment was welcomed, analysts worried about his lack of focus on small business and the challenges of implementation.

Most of the five "major geographically focus ed programmes" that form part of the infrastructure strategy have been brewing for some time.

A project for a railway line linking Limpopo's Waterberg coal fields with existing infrastructure was confirmed by Transnet Freight Rail CEO Siyabonga Gama last October, and plans for feasibility studies were announced in July.

Improving the Durban-Free State-Gauteng corridor is also not a new idea. A feasibility study for a high-speed broad-gauge railway line from Durban to Johannesburg was promised almost seven years ago, when Maria Ramos headed Transnet.

With development of a "major new southeastern node", said Zuma, the state was committed to building a dam in the former Transkei using the Umzimvubu River as a source. This dam was promised in 2007. There has been no tangible progress yet.

Other infrastructure projects also sounded like repeats of earlier announcements.

Plans to lay the basis for the National Health Insurance scheme were announced in last year's medium-term budget policy statement. Promises of universities in Mpumalanga and the Northern Cape date back to 2009 and were repeated most recently in the National Planning Commission's National Development Plan released in November.

Even Zuma's remarks about the effects of high electricity tariffs on economic growth are not new. Reserve Bank governor Gill Marcus has repeatedly voiced concern about the pace of hikes in administered prices, including electricity tariffs. Last month, she said the case for further significant above-inflation increases in electricity prices was questionable and such prices should not inhibit growth and investment.

Piet Croucamp, a lecturer at the department of politics at the University of Johannesburg, said the inference that nationalisation was not an option was new.

At a business breakfast on Friday morning, Zuma said nationalising mines was not ANC or government policy.

"The downside is that Zuma still suggests the government should create jobs. The government cannot create sustainable jobs," Croucamp said.

"The real place to create jobs is in the private sector and specifically small businesses. The government should regulate the process for the private sector to create jobs - that creates long-term sustainable employment."

Despite emphasising job creation, Zuma said nothing about the proposed R5-billion youth wage subsidy announced in 2010 to create 178000 jobs and due to start in April this year.

Chose Choeu, president of the SA Chamber of Commerce and Industry (Sacci), said while Sacci welcomed tangible benchmarks that featured in the address, the chamber would have liked to see more on job creation.

Sacci would have welcomed plans on support measures and easing the plight of small business by reducing regulatory bottlenecks and red tape to reduce the cost of doing business and stimulate job creation.

Coenraad Bezuidenhout, new executive director of the Manufacturing Circle, said the circle welcomed the news of a cut in port charges for manufactured goods. But the address was silent on urgent action needed in trade administration to ensure that cheap, illegal imports do not take away jobs, he said.

Business Unity SA welcomed the focus on infrastructure projects and said new partnerships between government and the private sector were essential.

But implementation and capacity is often where ambitious government plans stall.

Investec economist Annabel Bishop said that with correct implementation the focus on infrastructure in Zuma's address could eradicate poverty, inequality and unemployment within 30 years, provided other outstanding issues are also addressed.

"Labour market inflexibility needs to be urgently reduced, not escalated, to encourage youth employment, while uncertainty over property rights needs to be resolved and the proliferation of wastage and inefficiency in service and infrastructure provision addressed," she said.