‘DIS­AP­POINTED’

This is the gen­eral sen­ti­ment of busi­ness lead­ers and in­vestors in the wake of Pres­i­dent Zuma’s state of the na­tion ad­dress

CityPress - - Business - JUSTIN BROWN justin.brown@city­press.co.za

Pres­i­dent Ja­cob Zuma touched on a lot of the key is­sues that busi­ness told him this week they wanted ad­dressed, but his state of the na­tion ad­dress (Sona) left lo­cal cor­po­rates and in­vestors dis­ap­pointed. Sho­prite chair­per­son Christo Wiese told the SABC that he was look­ing for some­thing more dra­matic from Pres­i­dent Zuma.

There was a need for South Africa to fo­cus less on global prob­lems and get “our affairs in or­der”, he said.

The coun­try would have to suf­fer some pain to get things on the right track, Wiese said.

Peter Mon­talto, an econ­o­mist with No­mura in Lon­don, said on Fri­day: “The key for us was the to­tal lack of any new think­ing in wider govern­ment pol­icy to boost growth.

“There was only lim­ited recog­ni­tion of the cur­rent eco­nomic malaise ... There was no ‘rab­bit out of a hat’ mo­ment.”

Sithem­bile Mbete, a lec­turer at the depart­ment of political sci­ences at the Univer­sity of Pre­to­ria, said her sense was that Pres­i­dent Zuma had largely aimed his speech at busi­ness.

De­spite this, there were very few num­bers, de­tails or specifics in the speech, Mbete said.

“It is bizarre [that he did] not men­tion num­bers,” she said at a Wits Busi­ness School event on Fri­day that was held to re­view the pres­i­dent’s speech.

At the event, Andile Khu­malo, Power FM man­ag­ing di­rec­tor, said that Zuma did not cover any of the sub­stan­tial eco­nomic points.

“Does the pres­i­dent un­der­stand the econ­omy?” he asked.

Jan Sluis-Cre­mer, a Rand Mer­chant Bank cur­rency trader, said that the rand had been sold off later on Thurs­day in an­tic­i­pa­tion that Sona would pro­duce a shock or some­thing un­ex­pected.

“There was noth­ing in Sona, so the rand firmed a bit on Fri­day, but re­mains stuck in a range be­tween R15.75 and R16.25 against the US dol­lar,” he said.

Ear­lier in the week, Pres­i­dent Zuma met with a num­ber of top chief ex­ec­u­tives in Cape Town.

“We have had fruit­ful meet­ings with busi­ness, in­clud­ing the high-level meet­ing with CEOs on Tues­day this week,” Zuma said.

Ralph Mupita, Old Mu­tual CEO of emerg­ing mar­kets, said on Fri­day: “It was not pos­si­ble for the pres­i­dent to give very spe­cific ac­tion to the points raised on Tues­day.”

Khany­isile Kweyama, CEO of Busi­ness Unity SA, said that the points that busi­ness had raised with Zuma ear­lier in the week in­cluded stim­u­lus projects, job cre­ation – es­pe­cially in the small, medium and mi­cro en­ter­prise sec­tor – the credit rat­ing, strong fis­cal dis­ci­pline and in­creas­ing lev­els of tax.

Zuma men­tioned small and medium-sized en­ter­prises and the black in­dus­tri­al­ist scheme in his speech.

On the topic of fis­cal dis­ci­pline, Zuma said that govern­ment had un­der­taken to spend funds wisely and to cut waste­ful ex­pen­di­ture, but with­out com­pro­mis­ing on the core busi­ness of govern­ment and the pro­vi­sion of ser­vices.

Fi­nance Min­is­ter Pravin Gord­han would an­nounce fur­ther de­tails in his bud­get speech on Fe­bru­ary 24, Zuma added.

DA leader Mmusi Maimane said that Zuma could not just cut food and travel costs; he also needed to re­duced the size of his Cab­i­net and could have al­ready saved R4.2 bil­lion by do­ing so.

Turn­ing to the coun­try’s credit rat­ing, Zuma said: “Our coun­try seems to be at risk of los­ing its in­vest­ment grade sta­tus from rat­ings agen­cies.”

Power FM’s Khu­malo said that it would ap­pear that Zuma failed to send a sig­nal to the rat­ings agen­cies to avert a down­grade.

Kristin Lin­dow, Moody’s lead sov­er­eign an­a­lyst for South Africa, said: “Pres­i­dent Zuma’s state of the na­tion speech ac­knowl­edged the coun­try’s deep eco­nomic chal­lenges and pro­vided hints of fu­ture bud­get sav­ings.

“The mar­kets’ at­ten­tion in the short term will turn to the 2016/17 bud­get … and whether the mea­sures an­nounced will suc­ceed in steady­ing con­fi­dence.”

Kweyama ex­pressed con­cern about the man­age­ment of state-owned en­ter­prises.

How­ever, Zuma glossed over the is­sue and said that many of the state-owned en­ter­prises were per­form­ing “well”.

Zuma chose the ex­am­ple of the SA Na­tional Roads Agency Lim­ited, which is sub­ject to a lot of scru­tiny re­lated to its failed e-tolls pro­ject.

He also made no men­tion of sell­ing any of the state-owned en­ter­prises or of sell­ing stakes in state-owned en­ter­prises.

Maimane said the govern­ment should sell state-owned en­ter­prises and key as­sets.

Kweyama said that im­mi­gra­tion pol­icy was a key is­sue for lo­cal busi­ness, in­clud­ing its ef­fect on tourism and on at­tract­ing skilled work­ers.

“We have heard con­cerns from com­pa­nies about de­lays in ob­tain­ing visas for skilled per­son­nel from abroad. The draft mi­gra­tion pol­icy will be pre­sented to Cab­i­net dur­ing the course of 2016,” Zuma said.

Kweyama said there was a need for the re­view of leg­is­la­tion as the leg­isla­tive en­vi­ron­ment im­peded in­vest­ment.

Zuma said the govern­ment had heard the ap­peals for pol­icy cer­tainty in the min­ing sec­tor, es­pe­cially with re­gards to the Min­eral and Pe­tro­leum Re­sources De­vel­op­ment Act.

“The bill was re­ferred back to Par­lia­ment last year,” the pres­i­dent said. “We await Par­lia­ment to con­clude the pro­cess­ing, which we trust will be done ex­pe­di­tiously.”

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