President Ramaphosa’s disappointing SONA will do nothing for economic growth
14 February 2020
With its disruptive tactics, the EFF ensured that President Cyril Ramaphosa's State of the Nation Address (SONA) for 2020 started on a low note and, disappointingly, the President just kept up the same sad tune with not a single announcement that will stimulate economic growth.
Prior to the SONA, the FF Plus asked that steps must be taken to save the economy. As things stand, it is hard to see how the economy can grow with a single percentage point.
Various fundamental issues were touched on, but the solutions that the President offered are either simply cosmetic in nature or inconsequential.
The announcement that independent power producers will form part of the national power grid and that municipalities will be allowed to buy energy from them offered a single ray of hope.
The President's statement that South Africans must make pace with load shedding was extremely negative. It creates the impression that South Africa's power problems are deeply rooted and that they will not be solved in the foreseeable future.
One of the artificial attempts to draw the attention away from the country's pressing problems was to announce a third investment conference. It, however, delivers little more than promises of investments. The President too made promises of job creation, but they will not realise if failed policy directions are maintained and the economy does not grow.
It is extremely worrying that the President only vaguely made mention of the intention so use the Government Employees Pension Fund to save public enterprises like Eskom. He alleges that it will not pose a financial risk to the members of the Fund.
The FF Plus does not agree. It certainly does pose a real risk to the Fund and the fact that the President was so vague about the matter does not bode well.
The announcement of the new procurement legislation that the government will implement to obtain products and services from small to medium enterprises, specifically those owned by black people, draws a line through all the President's plans to stimulate economic growth.
It is merely an extension of the existing Black Economic Empowerment (BEE) policy and the FF Plus will oppose it in every way possible. The legislation means that the government's focus as regards procurement will be fixed on race and not on cost effectiveness and quality.
Although the President announced positive interventions to prepare the youth for the workplace, the government cannot create jobs. As long as restrictive labour legislation and the minimum wage are still in place, these attempts are doomed to fail.
The FF Plus has been advocating for the reinstatement of specialist policing units to combat crime for a long time now. Thus, the announcement that a unit will be established to crack down on fraud and exploitation in the construction industry is a step in the right direction.
The FF Plus wants to see that other similar units are established for serious crimes, like farm attacks and murder and robbery. It is of the utmost importance to combat these kinds of crimes.
In light of the President's disappointing SONA, the FF Plus can hardly foresee any economic growth and instead dreads that it will actually lead to greater unemployment among the youth. Additionally, expropriation without compensation will further hamper economic growth. It creates a lack of investor confidence while the country desperately needs economic growth for job creation.
Issued by Pieter Groenewald, FF Plus Leader, 14 February 2020