Sona reaction: PR win, flat on execution

14 February 2020 - 09:46 By Iavan Pijoos
President Cyril Ramaphosa delivered the State of the Nation Address in parliament on Thursday, and organisations and analysts reacting to it said the president must ensure the promises made are implemented.
President Cyril Ramaphosa delivered the State of the Nation Address in parliament on Thursday, and organisations and analysts reacting to it said the president must ensure the promises made are implemented.
Image: Esa Alexander

President Cyril Ramaphosa’s State Of the Nation Address (Sona) on Thursday was met with little enthusiasm, but received a PR win for satisfactory policy.

Intellidex analyst Peter Attard Montalto said Ramaphosa’s speech scored high for PR, with "okay" policy but was “flat” on execution.

Montalto scored Ramaphosa 8/10 for PR and rhetoric, 6.5/10 for policy and 2/10 for implementation.

“This was, therefore, a decent speech and a win in those narrow terms and will generate some buzz, but only action will move business sentiment.

“Raised expectations on a variety of policy fronts raises risks both politically and in terms of market disappointment, especially with the budget coming up soon.”

Pieter Bensch, executive vice president Africa & Middle East: Sage, said Ramaphosa delivered a sober assessment of the challenges the country faced, but it required action.

“It is especially encouraging to see  the government is taking steps to ease the energy crisis, which has crippled growth and hurt the sustainability of so many businesses big and small.”

President Cyril Ramaphosa delivered the state of the nation address (Sona) in parliament on February 13 2020. Ramaphosa addressed the issues of SA's embattled state-owned entities (SOEs), such as Eskom and SAA, and unemployment.

“The promises to procure emergency energy, to let municipalities procure their own power from independent power producers, and fast-track self-generation licenses for large industrial users, must be translated into urgent action.

“As the negative economic data for December 2019 shows, time is running out for our economy. Small businesses can’t afford to lose 20 business hours per week to load-shedding,” Bensch said.

The Organisation Undoing Tax Abuse (Outa) said unless Ramaphosa’s promises in his address are followed by concrete and faster implementation, the country will remain in a “precarious state”.

“We are running out of time. We still need to see the promised public performance agreements for ministers, along with a real new culture of transparency and accountability”. 

“While senior leaders implicated in state capture continue to walk free, society will remain rightfully wary in this regard,” Outa chief executive Wayne Duvenage said in a statement.

Announcements welcomed by Outa include the importance of broad-based coalitions with business, labour, special interest groups and wider civil society, a new path on energy, the acknowledgment that Eskom must be strengthened without putting workers’ pensions at risk or compromising the integrity of the financial system, and the promise of measures to reduce spending and improve its composition in the budget.

The civil organisation said matters that required attention included the creation of a sovereign wealth fund, youth unemployment and economic sector plans.

The Mineral Council said Ramaphosa’s “strong words on the country’s fiscal crisis are well received”.

“It is particularly welcome that he did not choose to understate the problems.

“The Minerals Council is encouraged by the president’s commitment to rapidly and significantly increase generation capacity outside of Eskom. The sporadic availability of power and instability of the national grid is seen as one of the greatest threats to the South African economy.

"We welcome the president’s undertaking to implement measures that will fundamentally change the trajectory of energy generation in the country,” it said in a statement.

North West University business school economist Professor Raymond Parsons said the “positive” impact of the policy framework outlined in Ramaphosa’s speech would depend on successful implementation and close collaboration with the private sector.

Parsons said Ramaphosa’s speech highlighted the grave socio-economic challenges currently faced by the country.

“The decision to allow energy generation outside Eskom, especially for well-run municipalities, is an important step in the right direction.

“It remains imperative to lessen the risk that Eskom continues to pose to SA’s economic performance. Other Sona announcements require more detail and need more clarification.”

Meanwhile, lobby group AfriForum said it seemed Ramaphosa was determined to “stick to the ANC’s recipe for failure, to rule the country over the abyss of socialism and poverty”.

“If Ramaphosa laid down concrete plans on how to, among others, stimulate economic growth, reassure international investors and tackle unemployment, one would be able to take this Sona seriously.

"However, Ramaphosa’s Sona is comparable to giving poison to a sick patient with the promise that it would heal him or her,” said Ernst Roets, AfriForum's head of policy and action.