Insights, Updates and News

Ramaphosa's new dawn

By JP Landman, Political analyst

Cyril Ramaphosa was elected President of South Africa on Thursday 15 February. He delivered his first State of the Nation Address (SONA) on 16 February where he declared ‘a new dawn’. How much of that new dawn is visible so far? Two caveats are in order:

  1. Ministers’ budget votes are only now being discussed in Parliament, and that is where most information is divulged. The President pronounces, ministers execute. We thus cannot compile a final tally yet.
  2. Also, not all the actions are of equal importance. Fixing state-owned enterprise (SOE) boards or SARS is arguably more important than organising a summit. Even so, we find the preliminary results instructive.

We counted 53 promised actions in the SONA. Of these 11 (21%) have been done, 19 (36%) are in progress, 9 (17%) have not been done yet, and we don’t have information on 14 (26%) of them.

The president's goal was to 'set the country on a new path of growth, employment and transformation

He explained that ‘This will be done by getting social partners in our country to collaborate in building a social compact on which we will create drivers of economic recovery.’

The idea of a social compact is a key recommendation of the National Development Plan. It was also a specific undertaking in Ramaphosa’s election manifesto. This is a hard and arduous initiative, but in this fractured country a necessary one. It will take a while to tick this one. Progress is unknown.

He stated that confidence had to be restored and an investment downgrade prevented. Both have been done.

The President also recognised that tough decisions would have to be made to close the fiscal gap and stabilise debt. In the National Budget following the SONA, VAT was increased – a tough call indeed. Done.   

A major push for the year would be to encourage significant new investment and to this end an investment summit would be organised within three months. Four investment ambassadors have been appointed ahead of the summit, which is now expected in the third quarter. In progress. 

A job summit would be held with the focus on how to grow the economy and make it more productive. Not done. 

Government aims to promote investment in key manufacturing industries with incentives like special economic zones and a localisation programme where textile, clothing, furniture, rail rolling stock and water meters are designated for local procurement. R57 billion will be spent on local goods. In progress. 

Transformation would be pursued through preferential procurement, support for black professionals and industrialists, competition policy that opens markets for black entrants, investment in businesses in townships and rural areas, and by dealing decisively with companies that resist transformation. In progress. 

On youth unemployment, the President promised to launch the Youth Unemployment Service Initiative that places unemployed youth in paid internships with companies. Together with the participating businesses, the aim is to create one million internships over three years. Done – launched in March, 100 companies signed up. The President also undertook to establish a youth working group so that the voices of the youth can be heard. Not done. 

On infrastructure, he wanted to assemble a team to speed up implementation, with a focus on budgets and monitoring systems. Progress is unknown. 

On mining, the President promised that engagements on the mining charter would be ‘intensified’. Done. He noted an indication by Parliament that the Minerals Amendment Bill would be finalised during the first quarter of 2018. Not done.  

On small business, four commitments were made: to build (with social partners) a support ecosystem, to honour government’s undertaking of a 30% set-aside for small business and co-operatives, to establish a small business and innovation fund to help start-ups, and to reduce the regulatory barrier for small business. In progress. 

The Small Enterprise Finance Agency has launched a programme to help entrepreneurs with disabilities. Done. 

On tourism, the President undertook to enhance support for destination marketing and to take further steps to reduce regulatory barriers and develop emerging businesses. Progress is unknown. 

Regarding science, technology and innovation, he undertook to appoint a Digital Industrial Revolution Commission to help position the country, and to finalise the allocation of spectrum to build efficient networks. Not done. 

The President also signalled that he wanted to appoint a Presidential Economic Advisory Council. Not done. 

Agriculture, land and expropriation 

The President undertook to accelerate land reform to bring more producers into the agricultural sector. This accelerated approach will include expropriation without compensation done in a way that increases agricultural production and food security and ensures that the land is returned to those from whom it was taken. He committed government to undertake a process of consultation on how to achieve this.In progress. 

Trade agreements 

The President noted that negotiations on acontinental free trade agreementwere progressing briskly and he expected an agreement would be concluded soon.The agreement was concluded in March, but government has committed itself to more consultation before tabling it in Parliament. Cabinet has endorsed the Tripartite Free Trade Agreement that covers 26 countries in Eastern and Southern Africa for parliamentary approval. Done. 

Labour market

The President wanted to introduce a national minimum wage on 1 May. Parliament has not concluded its legislative work on this. Not done.

Education

The President promised details on the financing of fully subsidised free higher education. That was done in the subsequent budget speech. Efforts would continue to improve the outcomes of public schools. He promised that all outstanding school infrastructure projects would be completed by the end of the next fiscal year. Both in progress.

Social grants

He gave his personal undertaking that there would be no interruptions in the payment of social grants on 1 April. Done. The public sector-led hybrid model would be developed to pay social grants. In progress.

Recognising the importance of NGOs and community-based organisations in tackling poverty, inequality and related social problems, a social sector summit would be convened this year. Progress is unknown.

Health

An additional two million people would be on antiretroviral treatment by December 2020 (in progress) and a cancer campaign would be launched in three months (not yet done). Certain NHI projects would commence in April (unknown) and the NHI Bill would be processed through government and submitted to Parliament. In progress.

Crime

The Community Policing Strategy to restore trust in the police as well as the Youth Crime Prevention Strategy to involve young people in crime fighting would be launched. A key focus for this year would be the distribution of personnel and other resources at police station level. Progress is unknown.

Building a strong and capable state

A process would be initiated to review theconfiguration, number and sizeof national government departments.Progress is unknown. 

A lot of attention was given to SOEs, with the promise to intervene decisively to stabilise and revitalise them, saying that action at Eskom was just the beginning. Done. 

Steps would be taken to remove board members from procurement and work with the Auditor-General to strengthen external audit processes. Progress is unknown. The funding model of SOEs would be re-visited. Progress is unknown.

The tide of corruption in public institutions would be reversed, promising that the State Capture Commission would commence its work soon. In progress.

Steps would be taken to stabilise SARS (done) and a commission of enquiry into SARS governance would be established. Not done.

The President promised to visit every department to engage with senior leadership and ensure that the work of government is effectively aligned. Progress is unknown.

So what?

The most dominant theme in the SONA was the economy, jobs and transformation. More than half of the President’s actions fell into that category.

  • Building a capable state has the second largest number of actions. There the focus is clearly on turning SOEs and the tide of corruption around.
  • Education, health and social support make up the balance of his programme.
  • A scorecard of 21% ‘done’ within the first 90 days and 36% ‘in progress’ is, in my opinion, not bad at all. Even some of the 17% ‘not done’ will be realised over the coming year, as will many of the 26% on which we do not have information. A solid beginning.
  • With clear priorities (which he has spelt out), a strong team (which he has in the critical area of the economy), and decisive action to build a capable state, the scorecard should improve considerably over the remaining 275 days of the year. 
  • The elephant in the room is of course land and the issue of expropriation without compensation. How he finesses this issue will determine his presidency. The stakes could not be higher.

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