Rampahosa's SONA stokes hope of economic revival
President Cyril Ramaphosa’s first state of the nation address has ignited hopes of a strong economic recovery under his leadership.
“The amount of time and effort spent discussing the economy is a stand out feature that hasn’t been there before,” said Kevin Lings, Stanlib chief economist, who noted the address comprised generally strong and positive statements on improving the economy. “In the speech and in the document, there is a genuine intention to address and focus on employment, highlighting it as the number one objective, to me that feels different.”
Standout features, Lings said, were the planned job and investment summits where obstacles to improving in these areas could be better understood. “Those dialogues have been absent from this economy for a very long time,” Lings said.
Promises of deregulation for improving the ease of doing businesses was most welcome and much-needed Lings said.
Ramaphosa’s comment that the mining sector should be treated as a sunrise sector and not a sunset sector was encouraging but one needed to be realistic, Lings said. “There are clearly limits to what can be achieved related to the cost and complexity of mining in South Africa.”
Jannie Rossouw head of the Wits School of Economic and Business Science welcomed the announcement that a presidential economic advisory council would be appointed.
“If constituted properly, it will be a structure that can inform the president of the country what is happening on the ground in terms of business in South Africa.”
A commitment to focus on the size of government was also a positive development Rossouw said.
The mention of expropriation of land without compensation – a policy which was contentiously adopted at the ANC’s 54th national conference in December – remained a concern, Rossouw said. “Especially because there is a big commitment to encourage foreign investment, so we will need to understand how the one fits with the other.”
Lings said that, overall, he felt the tone of the speech was fairly encouraging and it covered just about every base possible.
Economist Thabi Leoka said the wide-ranging speech may have been to Ramaphosa’s detriment. “I think this speech was great. But it was a lot - a lot of summits … and it touched on just about every aspect of the economy and the country,” said Leoka. “Poverty alleviation, industrialisation, inclusive growth, I felt it was everything, just like the National Development Plan … its like he is dooming it to fail.”
Lings however said the extensive speech suggested to him that Ramaphosa realises there a lot of work ahead, and is determined to get to it.
In order to achieve his ideals, Ramaphosa would need a “super team” behind him that could understand the policy and also implement it, Leoka said.
Leoka welcomed an emphasis on partnerships between government and the private sector – “especially since this government is constrained, financially and intellectually. Intellectually because it doesn’t have the expertise and experience”, she said.
If former president Jacob Zuma had said the same speech, it would have been taken differently, because of the type of person he is, Leoka said. “Business will step up because they want Ramaphosa to succeed.”
Rossouw agreed that there was a clear difference between this address read by Ramaphosa as opposed to Zuma. “Mr Zuma has the uncanny ability to read something without the text going through his brain,” he said. “It’s very clear Mr Ramaphosa engaged with the text and understands what he is saying.”