President Ramaphosa’s 2019 State of the Nation Address
A State of the Nation Address (SONA) is not like a formal contract, especially not in an election year. It cannot be “enforced”. But the one delivered by President Ramaphosa on 7 February 2019 came at a crucial moment. The South African economy is in an unhealthy state, while the revelations (by several commissions of enquiry) about the extent of the corruption, mismanagement and damage under the presidency of Jacob Zuma paint a dark and worrying picture. South Africa needs a bold rescue package under a firm hand.
In tralac’s February Newsletter we highlight the most important themes in the SONA 2019 and we ask specific questions: What are the main concerns and what areas are being identified as priorities? What are the plans for addressing them? How will they be implemented? How has this State of the Nation address been received?
We also add a brief discussion of the national budget, delivered on 20 February 2019. This is the reality check against which many of the promises in SONA should ultimately be read.
SONA 2019 is built around certain themes:
Firstly, we must accelerate inclusive economic growth and create jobs.
Secondly, our history demands that we should improve the education system and develop the skills that we need now and into the future.
Thirdly, we are duty bound to improve the conditions of life for all South Africans, especially the poor
Fourthly, we have no choice but to step up the fight against corruption and state capture.
Fifthly, we need to strengthen the capacity of the state to address the needs of the people.
It is election time in South Africa. In May this year the nation goes to the polls, for the first time under the leadership of President Rampahosa, who is also the leader of the governing party. The ANC has been ruling South Africa for 25 years now and the track record is not impressive. It now faces the additional challenges of internal divisions and the legacy of Jacob Zuma. This election will be a benchmark for President Ramaphosa’s support in the ANC and will show how much leeway he has for taking unpopular but necessary measures to improve competitiveness and to reform most State-owned Enterprises.
The changing multilateral system poses another test for the Government. As stated: “Unless we adapt, unless we understand the nature of the profound change that is reshaping our world, and unless we readily embrace the opportunities it presents, the promise of our nation’s birth will forever remain unfulfilled.”
To this must be added policy uncertainty, mismanagement and corruption. “We have also had to deal with the effects of state capture on vital public institutions, including our law enforcement agencies, whose integrity and ability to fulfill their mandate had been eroded in recent years.”
He recognizes that “the levels of growth needed to make significant gains in job creation will not be possible without massive new investment. Last year, our economy was confronted by the reality of a technical recession.”
The President has several other bold plans:
The World Bank’s annual Doing Business Report currently ranks South Africa 82 out of 190 countries tracked. “We have set ourselves the target of being among the top 50 global performers within the next 3 years.”
“Over the next six years, we will provide every school child in South Africa with digital workbooks and textbooks on a tablet device.”
There will be free higher education for qualifying first year students.
The mantle of power rests uneasily on the shoulders of President Ramaphosa. Since coming to office, he has tip-toed cautiously in some areas. But he has delivered a clear message, perhaps most notably to the international community, and has started to address the litany of challenges. A notable example is his firing of Tom Moyane, Commissioner of the South African Revenue Service (SARS), on 1 November 2018. During Moyane’s tenure, SARS had become a key cog in the wheels of state capture, and its capacity to collect revenue was effectively decimated.
The process of rebuilding, what was once a model institution, has begun, but the devastating effects are clear in the 2019 Budget. The Minister of Finance had to revise down the estimate of revenue collection that he had presented in his mid-term budget statement in October 2018 by R15.4 billion. A legacy of failure and mismanagement at SARS has resulted in the Government expecting a shortfall by almost R43 billion for the current fiscal year.
SONA is ambitious and comprehensive but it’s a first step only. Well-designed action plans, resources and a long-term vision are required. Support by the private sector, investors, and the citizens too will be necessary for turning South Africa around.
Ultimately, the record of the South African Government will be judged by results. Success depends on concrete steps, the honesty and resolve with which challenges will be tackled, and the selection of priority areas. The remedial action required for making South Africa a success will not happen overnight. And it will depend on many factors working out for us. The new dawn is still some time away.
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