Business leader has high hopes for Cyril’s Sona

With the President Cyril Ramaphosa delivering his State of the Nation (Sona) address on Thursday, Business Leadership SA (BLSA) is hoping that he will refrain from sloganeering and rather show a clear commitment to the hard work needed for reform implementation.

Busi Mavuso, BLSA chief executive, says in her weekly newsletter that Sona is a key agenda setter for the work of government and in an election year, there is probably more pressure than before to demonstrate success and make bold commitments to action.

“Last year, the president focused his speech on the recovery from the Covid pandemic.

“We have moved on and now our focus is much more on improving the performance of our economy, which is held back by factors that have nothing to do with Covid.”

She says the electricity crisis remains a significant constraint, despite the progress made, and the logistics system has become a disaster for the economy, requiring urgent intervention.

Last year, restoring energy security was the president’s “most immediate priority” and a year later, it is fair to say that there has been progress.

But she says Eskom’s operational performance, which the president promised would improve, remains frustratingly far from target

“However, with the growth of private supply, electricity security can be achieved, anyway. This progress is thanks to focused efforts by the Presidency working in tandem with business via the national energy crisis committee...

“The end is visible on the horizon if we maintain momentum.

“We must complete the restructuring of Eskom to set up an independent grid operator to allow for an open electricity market and drive increased investment in the grid, ensuring it has capacity for new generation.”

Mavuso also points out that last year’s Sona included many promises of increased investment in infrastructure, including logistics, bulk water and roads.

However, she says, official figures show that public spending on infrastructure continued to drift downward, while investment from the private sector has grown markedly in the past 18 months.

“That growth is in part thanks to positive reforms, particularly in allowing private investment in infrastructure, but we still see the public sector struggling to invest in infrastructure,” she says.

“There have been some positive moves to consolidate the infrastructure effort in National Treasury and I look forward to hearing from the president about how this problem will be unlocked.”