President Ramaphosa puts emphasis on measures to stimulate economy

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As expected, President Cyril Ramaphosa‘s State of the Nation Address (SONA) put emphasis on measures to stimulate economic growth.

He addressed the challenges of electricity supply shortages, government spending which he described as misdirected towards consumption and debt-servicing rather than infrastructure and productive activity, and the state-owned companies which continue to drain the national fiscus.

The State of the Nation Address comes against the backdrop of rolling power outages.

In addition, the latest figures by Statistics SA indicate that the unemployment rate remains unchanged at 29.1%.

The President was frank about the Eskom problems, that load shedding remains a possibility for the immediate future.

He, however, says it must be done cautiously.

“Where load shedding is unavoidable it must be undertaken in a manner that is predictable and minimises disruption and the cost to firms and households.”

He’s also laid out measures to meet electricity demand.

“We will also put in place measures to enable municipalities in good financial standing to procure their own power from independent power producers.”

Turning to the country’s finances, the President says they must be fixed.

He says the government is talking with workers and other stakeholders on measures to contain the public wage bill and reduce wastage.

However, a detailed strategy will be announced by Finance Minister Tito Mboweni when he delivers the budget.

“Low levels of growth mean that we are not generating enough revenue to meet our expenses, our debt is heading towards unstable levels and spending is misdirected towards consumption and debt servicing rather than infrastructure and productive activity. We cannot continue along this path nor can we afford to stand still.”

The President says State-Owned Companies must be financially viable.

On South African Airways (SAA), he says the business rescue practitioners will unveil their plans for restructuring the airline within the next few weeks.

“In the interests of South Africa’s aviation industry and our economy, it is essential that a future restructured airline is commercially and operationally sustainable and is not dependent on further government funding.”

The President also said that the government is prioritising fixing commuter rail services and that it is proceeding with the establishment of a state bank to extend access to financial services to all South Africans.

Click video below : President Cyril Ramaphosa delivers #SONA2020