Business reacts to State of the Nation Address
President Ramaphosa’s Sona is setting the country on course to become a dynamic future-orientated economy
Business Leadership South Africa:
PRESIDENT Ramaphosa’s State of the Nation Address (Sona) address suggests that the government will not only build on commitments made at the investment summit last year, but also move swiftly to unblock administrative and regulatory bottlenecks to domestic and foreign direct investment.
The President’s prioritisation of regulatory issues as the single most important impediment to growth is not only welcome, but is vital if the compact between government, business and labour to create jobs and advance inclusive growth and transformation is to be grounded in tangible results.
We know that addressing the growing regulatory burden, coupled with regulatory uncertainty, can be a major game changer for the economy.
In this regard we are particularly pleased that the President highlighted the Public Private Growth Initiative to mobilise investment in 19 sectors of the economy as a signal achievement in the developing partnership between the government and business.
In their presentations to the government recently, chief executives and chairpersons from 19 sectors indicated in summary that an increase in sector contributions to gross domestic product of 3 to 5 percent is attainable over the next five years, subject to prevailing circumstances in specific sectors and the expected multiplier impact on associated businesses.
The aggregated projected investment from a select number of the 19 sectors amounts to more than R500 billion over the next four to five years if a high-growth path is pursued in our economy.
We have consistently argued that both the removal of inhibitors to growth and fundamental socio-economic transformation, including an improved education system and the development of a more robust skills base, is integral to accelerating growth in a more inclusive and sustainable way.
We therefore welcome the President’s prioritisation of two years of compulsory Early Childhood Development for all children before they enter Grade 1 to equip them to succeed in education, in work and in life.
Getting South Africa on to a highgrowth trajectory demands that the country fundamentally changes its game plan and places small business at the centre stage in the fight against poverty, inequality and unemployment.
We therefore take comfort to the President’s commitment to unlock opportunities for new economic entrants by, among other interventions, creating a more level playing field.
Besides the President’s resolve to enact the Competitions Amendment Bill, we believe that the transformation of the structure of the South African economy and the size and configuration of the state is long overdue.
This brings the institutional and governance structure of our stateowned enterprises clearly under the spotlight.
The President’s resolve to build a capable, ethical and streamlined state across all spheres of government and the economy will ensure a better, more consolidated and more co-ordinated effort to support growth in our country. State owned entities should be the centre of our economic and developmental trajectory.
We wholeheartedly embrace the President’s recognition of the scale of Eskom’s crisis and the commitment to immediately embark on a process of establishing three separate entities – Generation, Transmission and Distribution – under Eskom Holdings. We agree that this will ensure that we isolate cost and give responsibility to each appropriate entity.
It is indeed imperative that we undertake these measures without delay to stabilise Eskom’s finances, ensure the security of electricity supply, and establish the basis for longterm sustainability. In responding to this challenge, we stand ready as business to jointly work out the details of a just transition at Eskom that will address the needs of all those who may be affected.
It is time to give practical effect to our collective vision of accelerated, inclusive and sustainable growth. The President has once again sent a call to the government and business to vigorously tackle unnecessary inhibitors to shared prosperity and social solidarity, including the scourge of corruption.
As business, we wish to respond to the President’s call by committing to continue to play our part in building a durable social compact for fundamental social and economic transformation.
Business Unity South Africa:
BUSINESS Unity South Africa (Busa) agrees with the emphasis on economic growth, the pressing need to create jobs and prioritising skills and education, as outlined in President Cyril Ramaphosa’s Sona.
“We also appreciate the President’s establishment of a commission on the 4th Industrial Revolution,” said Busa President Sipho Pityana. Busa particularly commends the President’s commitment to deal with corruption, as well as the revelations coming out of the Zondo Commission of Inquiry.
In this regard, the new law enforcement unit will, in time, go a long way in combating corruption and put an end to looting.
Busa concurs with the urgent need to implement an effective turnaround strategy at Eskom. The organisation also welcomes the general thrust of policies mapped out both in terms of social and macro-economic initiatives, which come in tandem with programmes of work designed to give effect to the Sona.
The speech is unequivocal in sketching South Africa’s national priorities and unambiguous about its policy direction, as well as setting the country on the course to become a dynamic future-orientated economy.
It is Busa’s considered view that the economy is the foundation stone of creating a just and equitable society. Creating a conducive investment environment by lowering the regulatory burden and ensuring policy certainty is key to increasing South Africa’s chances of reaching its investment goals.
Furthermore, a fit-for-purpose education and skills system, ensuring that South Africa is ready for the realities of the Future of Work, addressing poverty and inequality, dealing decisively with state capture and corruption, and ensuring that the state has adequate capacity are all fundamental pillars that will help support an optimal operating environment.
Although Eskom is the most pressing case among state-owned entities (SOEs), this is also the opportune moment to take decisive action on parastatals to ease pressure on state finances.
At its recently concluded Business Economic Indaba, Busa expressed a willingness to work with the government to play a constructive role in addressing the challenges faced by the country’s SOEs.
Busa emphasises that meaningful and aligned action, as well as implementation, are now needed to give tangible expression to and reinforce the national vision articulated in the Sona. It will also be crucial to hold the Cabinet to account on ineffectual delivery.
“The announcements pertaining to the signing of the Competition Act Amendment Bill, the National Health Insurance, changes to the National Prosecuting Authority Act and land policy are noted. Of significance is accelerating the release of high-speed spectrum, which will aid efforts to ready South Africa for the 4th Industrial Revolution, as well as the President’s emphasis on creating a conducive environment in which business can participate in the economy,” said Pityana.
The organisation also notes plans to develop the oceans economy and to further liberalise the visa system to attract more tourists. Busa welcomes the emphasis on collaboration and the call for business to work with other social partners – the government, labour and community.