South Africa

SONA 2019

Searching for national inspiration, Ramaphosa protects Eskom, preserves the SARB’s mandate and dreams of a futuristic city

President Cyril Ramaphosa. (Photo: Leila Dougan

In a workman-like State of the Nation Address, President Cyril Ramaphosa on Thursday listed his administration’s priorities — from economic growth, job creation, cutting poverty, boosting education to rescuing Eskom with a R230bn bailout and creating ‘an ethical state’. But the call for hope and aspiration — and for South Africa to dream boldly amid challenges — fell short.

The enormous television screen erected in Parliament Avenue on the parliamentary precinct boomed out President Cyril Ramaphosa’s State of the Nation Address (SONA) — to more or less no one. With the streets around Parliament closed off for most of the day by steel fences and groups of police officials on guard, the military marching bands, the cavalcade and the presidential motorcade drove past security service personnel and the occasional inner-city worker and resident.

Into this bubble stepped a tired-sounding Ramaphosa, trying to turn tough times into opportunity at the podium of the National Assembly.

Working together, we have laid a firm foundation on which we can build a country in which all may know peace and comfort and contentment. Yet, we also meet at a time when our country is confronted by severe challenges. Our economy is not growing. Not enough jobs are being created. This is the concern that rises above all others. It affects everyone,” said the president. “We need to focus on those actions that will have the greatest impact, actions that will catalyse faster movement forward.”

There are two main take-outs from Thursday’s SONA: The R230-billion bailout for Eskom over the next decade — much larger than the R150-billion February’s Budget had provided for — and Ramaphosa drawing a line in the sand over not changing the mandate of the South African Reserve Bank.

Like so much in Ramaphosa’s 6,364-word speech, the announcement that Parliament would “on an urgent basis” pass a special appropriations Bill to make available “a significant portion of the R230-billion fiscal support that Eskom will require over the next 10 years in the early years”, left the details to Finance Minister Tito Mboweni to spell out later.

Eskom, which is more than R420-billion in the red and as recently as the end of March 2019 required urgent government support as it was unable to meet its obligations, only had enough money to carry it to the end of October 2019.

For Eskom to default on its loans will cause a cross-default on its remaining debt and would have a huge impact on the already constrained fiscus… This we must do because Eskom is too vital to our economy to be allowed to fail.”

As the money details were left to another time, progress about Eskom’s unbundling and new chief financial officer were also kicked into touch. But Ramaphosa had a message for citizens — pay for the electricity used.

Failure to pay endangers our entire electricity supply, our economy and our efforts to create jobs. The days of boycotting payment are over…”

But on the Reserve Bank, Ramaphosa seemed to have found his backbone. After damaging public spats within the governing ANC over whether the mandate of the central bank must be changed — which caused the rand to plummet — Ramaphosa as party president issued a statement after a meeting of the top six officials to draw the line: The Reserve Bank mandate would remain as outlined in the Constitution, to protect the value of the currency in the interest of balanced and sustainable economic growth, pointing to the constitutionally-required consultations between the central bank and the finance minister.

On Thursday, Ramaphosa as South Africa’s president drew the same line:

Our Constitution mandates the South African Reserve Bank to protect the value of our currency in the interest of balanced and sustainable growth. Today we reaffirm this constitutional mandate which the Reserve Bank must pursue independently, without fear, favour or prejudice. Our Constitution also requires that there should be regular consultation between the Reserve Bank and the Minister of Finance to promote macroeconomic co-ordination, all in the interests of employment creation and economic growth.”

And the ANC fell into line.

What he (Ramaphosa) has said is the policy of the ANC. We are fully behind that,” said ANC treasurer-general Paul Mashatile immediately after the address. “There is no problem. We are all together.”

On Eskom, the ANC is confident the power utility will be fixed. The process of restructuring has begun, said Mashatile, hinting that announcements would be made “soon”.

Ramaphosa’s address was supported by the South African Communist Party (SACP) and Cosatu, which expressed some reservations over the silence on state-owned entities other than Eskom, including the financially troubled SAA, which needs R3.5-billion by month-end, the SABC and the “many aspects which lack clear targets and time-frames”.

Opposition parties were not quite so generous. DA leader Mmusi Maimane said the SONA was “all talk, no detail, living a dream”, adding in a statement later that “committing to a litany of 10-year goals means very little to people who desperately need immediate change”.

Ramaphosa “said nothing… he came to speak about his imagination”, said EFF leader Julius Malema, while IFP Chief Whip Narend Singh was also critical about the “lots of hope and dreams and no quick wins. We need quick wins”.

Quick wins were largely absent in Ramaphosa’s 10-year vision in which he publicly confirmed what has long been rumoured — his admiration of Chinese leader Xi Jinping.

If China could build a brand new Bejing-like city, why not South Africa?

I dream of a South Africa where the first entirely new city built in the democratic era rises, with skyscrapers, schools, universities, hospitals and factories,” said Ramaphosa, crediting this dream to conversations with Co-operative Governance Minister Nkosazana Dlamini Zuma, International Relations Minister Naledi Pandor, ANC deputy secretary-general Jessie Duarte and “President Xi Jinping, whose account of how China is building a new Beijing has helped to consolidate my dream”.

That city dream was a curve-ball, perhaps meant to galvanise big dreams even in these challenging times for South Africa, but more than one SONA attendee pointed out the need for South Africa to get the basics right. Access to decent housing, dignified sanitation and basic services remain a challenge or are simply missing in too many places across the country.

Instead, Ramaphosa talked of introducing coding at schools — in his February address it was tablets for all — and given the need for lower data costs, as outlined by young people, called “on the telecommunications industry further to bring down the cost of data so that it is in line with pricing that prevails in other countries in the world”.

Government’s intent to provide policy and regulation has been stalled, although Ramaphosa indicated Communications Minister Stella Ndabeni-Abrahams would direct the Independent Communications Authority of South Africa to begin the spectrum licensing process, including “measures to promote competition, transformation, inclusive growth of the sector and universal access”.

This was one of the few new announcements, while the need for job creation, particularly for young people, and the potential for economic gain through increased tourism activity harked back to the pre-election February SONA. Ditto support for black emerging farmers.

Talking about land, Ramaphosa studiously avoided expropriation without compensation — Parliament has yet to revive the ad hoc committee on amending Section 25 of the Constitution that lapsed with the end of the previous term — and focused instead on the presidential advisory panel’s report that, once approved by Cabinet, would form the basis of a “comprehensive, far-reaching and transformative” land reform programme.

Faster economic growth also requires accelerated land reform in rural and urban areas and a clear property rights regime,” Ramaphosa said, adding later: “In the immediate term, government will accelerate efforts to identify and release public land that is suitable for smart, urban settlements as well as for farming.”

There was much about plans and long-term planning in Thursday’s SONA, including getting the National Prosecuting Authority to develop a strategy to recover stolen public money, while through the state-owned entities council, work was underway to address poor governance and inefficiency.

We are committed to building an ethical state in which there is no place for corruption, patronage, rent-seeking and plundering of public money. We want a corps of skilled and professional public servants of the highest moral standards — and dedicated to the public good,” said Ramaphosa.

Dreaming is good — it’s potentially inspirational. But getting the basics right, and setting firm policy directives with realistic time frames is the often dreary reality of good, and great, governance. Of that, there was little on Thursday. DM


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