Economic analysts and ordinary citizens alike are looking forward to the President’s State of the Nation Address (SONA) on Thursday. This comes as the country faces a number of serious challenges, with persistent rolling blackouts at the top of the list.
President Cyril Ramaphosa will be under pressure to announce immediate solutions to the current energy crisis and other pressing challenges like unemployment.
SABC News Senior Economics reporter Nompumelelo Siziba interviewed economists and labour leaders about their SONA expectations:
The nation is in a bad state – the energy crisis remains a daily nightmare for businesses and households alike. It’s expected to sharply derail economic growth this year, which will further exacerbate the country’s social woes.
South Africans will be looking for more than just a nice speech – they want material action that will help improve their lives.
Senior Economist at FNB, Siphamandla Mkhwanazi says, “We expect the president’s message to centre around three broad themes: the first one being the energy plan. here we expect an honest reflection on what progress has been made regarding this and what South Africans should expect going forward. The second category is the impact of this load shedding, particularly on small businesses as well as households, so here the question is, how is the government going to support struggling households and struggling businesses.”
Labour federation COSATU says they have high expectations of President Ramaphosa’s speech, adding that a lot of rides on it for workers.
COSATU’s Parliamentary co-ordinator, Matthew Parks explains, “The economy is not going to grow and unemployment cannot fall if we have up to 10 hours of load shedding a day. The president we hope will announce a state of the disaster and that every possible resource and support will be given to Eskom by all organs of state and society to ensure that we can reduce load shedding. Equally, similar measures are needed to give to support our passenger freight rail network, which is under siege from criminal elements and cable theft and vandalism.”
At the mining indaba this week, the issue of poor logistics as a result of operational problems at Transnet has been a key issue. Addressing the issue of improving affordable transport networks for cargo and for people will likely be touched on.
The speech will be closely watched on how the issues of structural constraints are being dealt with.
CITADEL’s Chief Economist, Maarten Ackerman says “The nation at this point is looking for one thing and that is for a solution of the structural issues that are preventing us from moving forward, of which obviously the electricity issue is front of mind, but it’s not just that. It is the whole failure of the total logistical infrastructure, harbours, rail and the like, so I think what I would like to see is not an update of what’s been happening this last year, it is more of an urgent guide in terms of we are aware of these issues and this is what we are planning to do ASAP.”
President Ramaphosa has been campaigning for local and foreign direct investment since he took office in 2018. But, the reality is that business confidence has been worsening in recent years, more so now with the increased power blackouts.
Investors will want to hear about more tangible results when it comes to policy to better see the country’s potential.