Electioneering address lacks detail – economists

As expected, this year’s State of the Nation Address (Sona) was just electioneering with no detail from President Cyril Ramaphosa on how government will tackle the many challenges that cause poor economic growth, economists say.

The president was always going to be speaking to the voters, especially given the poor ANC polling data released over the past week, economists at the Bureau for Economic Research (BER) Lisette IJssel de Schepper, Romano Harold and Nicolaas van der Wath said.

“As always, the focus of the Sona was on accomplishments, including South Africans’ wins on the sports field and cultural front.”

The important funding details and arguably even more important implementation plans are largely left to the budget and respective ministers, while Ramaphosa blamed global factors and state capture and corruption for some of the current economic challenges. He was quite frank about SA’s youth unemployment problem, the BER economists said.

“It was somewhat ironic that the statement that ‘energy security is on track’ was almost immediately followed by the notification from Eskom that load shedding would be ramped up to stage 3, which changed to stage 4 overnight.”

However, they said, we must be thankful for small mercies – the president did not include references to smart cities or other pie-in-the-sky projects, with the speech perhaps being more relatable to many SA citizens, and voters.

“In line with our long-term view about the Social Relief of Distress grant, the president said it will be extended, assumingly beyond the current extension to March 2025 and improved as a first step to income support for the unemployed.”

This should be received positively by the markets. “While there are merits to a basic income grant, a more incremental approach would help with affordability from the fiscus’ side.”

That the National Health Insurance would be implemented incrementally was also welcomed.

“Better outcomes are likely with a slower approach.”

Acknowledgement of the necessity of investment in transmission infrastructure and further financial pledges for the Just Energy Transition Investment Plan was welcome, too.

Mention of reform of the freight rail and logistics systems were expected, but there was nothing concrete.