Sona 2018: Ramaphosa focuses on economic growth, job creation

As widely predicted, efforts to revitalise the economy and tackle unemployment – particularly among the youth – underpinned this year’s State of the Nation Address (Sona), in keeping with policy resolutions adopted at last year’s ANC elective conference. In addition to facilitating ‘further … collaboration between business and labour in ‘restoring (investor) confidence and preventing (another) downgrade’, government will initiate the process of ‘building a social compact’ on the ‘drivers of economic recovery’ – as Legalbrief Today has already reported. Over and above this, a presidential economic advisory council will be established to identify ways of ensuring ‘greater coherence and consistency’ in economic policy implementation; and ‘better equip … government to respond to changing economic circumstances’. According to the President, ‘it will draw on the expertise and capabilities’ of academics as well as organised labour, business and civil society, reports Pam Saxby for Legalbrief Policy Watch. 

Further, with a view to encouraging ‘significant new investment’ in the economy, a conference will be held to market the country’s ‘compelling … opportunities’ – among other things through ‘the strategic use of incentives and other measures’. This will no doubt feed into plans for reversing the decline in manufacturing capacity. Given that job creation will be central to government’s 2018 agenda, a jobs summit is also planned with the aim of aligning ‘the efforts of every sector and … stakeholder behind the imperative of job creation’. Among other things, the summit will explore the fundamentals of: a ‘more productive’ economy; upscaling company investment; a ‘better equipped’ workforce; and an ‘expanded’ economic infrastructure. The focus of discussions will be on ‘practical solutions and initiatives’ for ‘immediate’ implementation.

Calling on financial institutions in general to partner with government in ‘mobilising resources to accelerate the land redistribution programme’, Ramaphosa said that government will embark on ‘a process of consultation to determine the modalities’ of land expropriation without compensation so that – in redressing past injustices – this controversial measure nevertheless also ‘increases agricultural production (and) improves food security’. The overarching objective of making ‘effective use of all the mechanisms at … (government’s) disposal’ in redistributing land is apparently to ‘bring more producers into the agricultural sector and … make more land available for cultivation’ in an effort to ‘realise’ agriculture’s ‘enormous economic potential’.

According to the President, the Mineral and Petroleum Resources Development Amendment Bill is expected to have completed its passage through Parliament by the end of next month. He is confident that, once enacted and operational, the amendments concerned will ‘entrench existing regulatory certainty, provide for security of tenure and advance the socio-economic interests of all South Africans’. Engagements with ‘all stakeholders in the Mining Charter’ will be intensified with the aim of making it a ’truly … effective instrument’ in ‘sustainably transforming the face of mining in SA’. ‘By working together, in a genuine partnership, underscored by trust and a shared vision, I am certain we will be able to resolve the current impasse and agree on a charter that both accelerates transformation and grows this vital sector of our economy,’ Ramaphosa said, noting its ‘massive unrealised potential’.

In intervening ‘decisively’ to ‘stabilise and revitalise state owned enterprises (SOEs)’, among other things government will: ‘change the way … boards are appointed, so that only people with expertise, experience and integrity serve in these vital positions’; ‘remove board members from any role in procurement’; and ‘work with the Auditor-General to strengthen external audit processes’. In addition – noting that ‘the challenges at some … SOEs are structural’, that their revenue streams are not ‘sufficient’ to fund operational costs, and that they cannot continue to’ borrow their way out of … financial difficulties’ – government will begin a ‘process of consultation with all stakeholders’ to review the SOE funding model and explore ‘other measures’ aimed at ensuring that these entities fulfil their economic and developmental mandates. Focusing on ‘better coordination, oversight and sustainability’, work on ‘the broad architecture’ of the SOE sector will continue.

Other issues addressed in the Sona included: establishing a commission of inquiry into tax administration and governance, to restore the credibility of the South African Revenue Service and ‘strengthen its capacity to meet … revenue targets’; initiating ‘a process to review the configuration, number and size of national government departments’; reducing regulatory and funding barriers to small business development; building ‘a small business support ecosystem’ to assist, nurture and promote entrepreneurs; a social sector summit to explore and address the challenges faced by non-government and community-based organisations in ‘tackling poverty, inequality and related social problems’; and national health insurance. In anticipation of ‘finally’ introducing universal health coverage, the National Health Insurance (NHI) Bill is expected to be ‘submitted to Parliament in the next few weeks’ – while NHI projects targeting society’s ‘most vulnerable people’ will begin ‘in April’. Confirming that free higher education and training will be available this year to ‘first year students from households with a gross combined annual income of up to R350 000’, the President said that ‘all aspects’ of financing the scheme will be clarified in next week’s Budget.