OVER TO PRAVIN
In his Sona, President Jacob Zuma dumped SA’s current financial turmoil squarely in the lap of Finance Minister Pravin Gordhan who, he said, would lead a task team to turn the economy around.
Political parties and experts in the finance sector agree that President Jacob Zuma’s State of the Nation Address (Sona) on Thursday fell short of bringing South Africans any solace about the country’s ailing economy.
In his speech, Zuma referred several times to responsibilities falling to Finance Minister Pravin Gordhan following Sona. He announced that Gordhan would be leading an economic task team to turn the current financial situation around, but did not give details.
Zuma said Gordhan would give specifics about the special economic task team on February 24 when he delivered the National Budget. Zuma also said public funds had to be spent “wisely” without compromising the core business of government, reiterating past comments by the ministry of finance that there would have to be strong motivation for overseas trips and departmental expenditure on entertainment and social gatherings.
In reaction to Sona, investment group Nomura said there was a “total lack of a new way of thinking”. No rabbit had been pulled out of the hat, senior emerging markets strategist Peter Att ard Montalto said.
There had only been limited recognition of the financially strained situation in the economy which has resulted in South Africa being downgraded by international rating agencies to just above junk status.
“As such, our low expectations were broadly met, but local expectations, which were looking to give the benefit of the doubt, are likely disappointed,” said Montalto. “There were no shock-and-awe moments to show decisiveness, no pulling of rabbits out of a hat to show a different way of thinking and no recognition that business as usual was insufficient.”
CEO of Debt Rescue Neil Roets said Zuma had offered no hope that government understood how dire the financial situation in the country was. Nor was there any indication of what the state was planning to do about it.
“Zuma was ignoring the elephant in the room,” he said.
The DA charged that Zuma had again demonstrated he could not be trusted to grow the economy, create jobs or fight corruption. The party’s leader, Mmusi Maimane, said Zuma needed to announce bold and innovative interventions and plans of action to create jobs for the 8.3 million jobless South Africans trapped in unemployment.
But no new plans were forthcoming.
“It is quite clear that President Zuma is simply unable to kickstart our ailing economy,” he said.
Zuma was still using the 2008 economic crisis as a scapegoat, “spewing out economic indicators without recognising that his government’s policies are the very reason for poor performance”.
Maimane said Zuma should have used the Sona platform, at a minimum, to declare: a decisive commitment to averting another credit ratings downgrade; a plan of action to deal with the disastrous state-owned enterprises; the drought as a national crisis; and a proper working plan on higher education.
“One thing was made clear – President Zuma has not one shred of legitimacy when it comes to the economy,” said Maimane.
“And without a thriving economy, we will never create the millions of jobs we so desperately need.”
Freedom Front plus leader Pieter Mulder said Zuma had been “unimaginative” and did not really address the country’s serious economic problems. He said Zuma’s “symbolic message” that foreign trips, receptions and conferences would be limited was a step in the right direction, but it was not enough as it would not lead to major financial savings.