Though the state of the nation address inevitably resonates with a wide range of geopolitical and socioeconomic issues of importance to the nation, the business community will be particularly interested in what President Cyril Ramaphosa says about meeting South Africa’s immediate economic challenges.
The economy is struggling to gain momentum at a time when it is faced with global and domestic headwinds. The SA Reserve Bank’s latest revised GDP growth forecasts are 0.3% (2023), 0.6% (2024) and 1% in 2025, mainly attributed to the highly negative impact on economic prospects of the prolonged Eskom crisis and the lack of energy security.
The Sona remains the definitive leadership platform for President Ramaphosa to rebuild confidence and set the tone for the way ahead for the economy in 2023. ‘Flogging the system’ will no longer achieve results: reform is the key.
The Sona is an opportunity for Ramaphosa to much more effectively and clearly mobilise the factors that are under our control and to help remedy the serious failures that now badly inhibit South Africa’s economic performance. The stamp of authentic leadership must run like a golden thread through the Sona.
A sustained focus on a few priorities is now essential to unblock the serious obstacles to job-rich growth. Business will especially want to hear about urgently fixing key state-owned enterprises such as Eskom and Transnet.
After unpacking the Sona on February 9, business should also want to feel less uncertain about the government’s next moveand have more clarity about the implementation of growth-friendly policies and projects.
Persistent and elevated policy uncertainty has been shaped by several factors, especially in the energy and transport spheres. They have played a major role in preventing fixed capital formation from reaching optimum levels.
We want to turn many more citizens into victors over poverty and deprivation, rather than victims trapped in the unemployment and welfare vice.
The choice now is between real economic growth with all its advantages, or the yoke of low growth with its creeping socioeconomic costs and welfare dependency. We want to turn many more citizens into victors over poverty and deprivation, rather than victims trapped in the unemployment and welfare vice.
The number of people receiving social grants now greatly exceeds the number of employed people.
The Sona must help promote effective delivery and the use of power and collaboration to get South Africa out of its present “low growth trap”.
A bigger, stronger and better economy now requires multi-tiered good news on the implementation front in the Sona. The ball remains largely in South Africa’s court.
The decisive political mandate enjoyed by Ramaphosa must be visibly translated into tangible implementation of a positive reform agenda that now has urgency and momentum. Absent that, it is hard to see the economy attaining the investment and job creation levels it needs this year.
The Sona remains the definitive leadership platform for Ramaphosa to rebuild confidence and set the tone for the way ahead for the economy in 2023. “Flogging the system” will no longer achieve results: reform is the key.
A reshuffled cabinet must be committed to that goal. The Sona must embody a firm implementation-led action agenda, together with support from the private sector. Words must be matched by credible deeds and timelines should be set and enforced.
“For if the trumpet gives an uncertain sound, who shall prepare himself to the battle?”
— Parsons is a professor at the North West University Business School
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