Five things you should know about Sona 2016
You’ve read about the heckling and the EFF’s now-customary storming out of Parliament, but what was the actual substance of President Jacob Zuma’s state of the nation address? If you can’t be bothered to wade through the over 5 000 words we’ve got you covered. Zuma’s address was expected to focus on the economy and he delivered with a speech that was strongly pro-business in parts. Here are five highlights.
1. Zuma is listening to business.
Ahead of the address there were reports that Zuma was compelled to pay careful attention to business leaders in SA – who have become a lot more vocal in holding the president to account after his irresponsible axing of previous finance minister Nhlanhla Nene which sent the rand into a tailspin. In his speech on Thursday Zuma seemed to confirm that he was taking business far more seriously, saying: “We have heard the suggestions from business community on how we can turn the situation around and put the economy back on a growth path.” He added: “We have heard the points about the need to create the correct investment support infrastructure.”
2. Certain state-owned companies could be phased out
If business had a firm hand in the speech it would make sense for them to draw attention to the abysmal performance of the country’s state-owned enterprises (SOEs). Zuma emphasised that these must be “financially sound”, “properly governed and managed”. Zuma also seemed to hint at major restructuring of SOEs in the works, saying: “We have to streamline and sharpen the mandates of the companies and ensure that where there are overlaps in the mandates, there is immediate rationalisation. Those companies that are no longer relevant to our development agenda will be phased out.”
3. Zuma may be pressurised into scaling back on his nuclear ambitions
The proposed deal to acquire 9 600MW nuclear power stations will dwarf the controversial arms deal and has already caused concerns with reports that Russia was allegedly the preferred bidder in what appears to be a very problematic deal. It also seemed to be one of many points of contention between Nene and Zuma, with treasury estimating a cost of R1.4-trillion and the pro-nuclear cabal putting it at just R600-billion.
A subdued Zuma, who has been chastised by business and his party for axing Nene, reaffirmed that the “nuclear energy expansion programme remains part of the future energy mix” but added that government would “test the market to ascertain the true cost of building modern nuclear plants”’ and emphasised that “we will only procure nuclear on a scale and pace that our country can afford”.
Current finance minister Pravin Gordhan was thought to have had a strong hand in this speech and may well have re-asserted Nene’s cautions around cost.
4. Government’s getting serious about wasteful expenditure
Government has talked big on wasteful expenditure for a while – with good reason. Last year auditor general Kimi Makwetu said there had been irregular expenditure of R25.7-billion across the country’s national and provincial departments, and public entities, for the 2014-2015 year.
While that number was a decrease of 27% from the previous year’s figure of R35.28-billion, it’s still too high and the public has long regarded government’s more lavish use of public money with a cynical eye. Zuma went for easy wins by announcing a few new cuts in Thursday’s speech.
- Overseas trips will be curtailed and those requesting permission will have to motivate strongly and prove the benefit to the country.
- The sizes of delegations will be greatly reduced and standardised.
- Further restrictions on conferences, catering, entertainment and social functions will be instituted.
- The budget vote dinners for stakeholders hosted by government departments in Parliament after the delivery of budget speeches will no longer take place.
There are more details to come at the budget speech later this month according to Zuma, who urged other parts of government to also cut down their spending.
5. ...And the executive is pro-one capital
Perhaps the biggest announcement in terms of curbing government costs, Zuma weighed in on the debate around South Africa’s two political centres: Pretoria and Cape Town, which necessitates politicians having two houses and cars across both capitals. “A big expenditure item, that we would like to persuade Parliament to consider, is the maintenance of two capitals, Pretoria as the administrative one and Cape Town as the legislative capital,” said Zuma. “We believe that the matter requires the attention of Parliament soon.”
Yet while there were some highlights to note, there was plenty to disappoint. The rest of Zuma’s speech varied in quality, lacking substance in part and details on how the various promises were to be implemented. The president touched on a wide array of government projects and concerns, but he veered away from talking in-depth about how his administration would work better with chapter nine institutions like the public protector, as public protector Thuli Madonsela later pointed out.