Business Maverick

ANALYSIS

Fynbos and aloe analogies aside, Ramaphosa’s Sona 2021 signals tough times ahead

Fynbos and aloe analogies aside, Ramaphosa’s Sona 2021 signals tough times ahead
(Illustrative image | President Cyril Ramaphosa. (Photos: EPA-EFE / ROGER BOSCH BRENTON GEACH / LEILA DOUGAN)

A nod to labour with the three-month extension of the R350 Covid-19 grant and special unemployment support. A nod to business with the long-awaited scarce skills lists, and undertakings on independent power production. Yet Thursday’s State of the Nation Address was much of muchness.

President Cyril Ramaphosa took his fynbos, which rises after fierce fires, to Finance Minister Tito Mboweni’s aloe that survives dry spells. 

But when the two politicians respectively in charge of South Africa’s government and the national purse haul out the analogy of hardy plants to emphasise resilience, it’s a sign of more tough times ahead. Regardless of the spin. 

(L)ike the hardy fynbos of our native land, we too have proven to be resilient in many ways,” said Ramaphosa on Thursday when he delivered the 2021 State of the Nation Address (Sona). Four months earlier in October’s Medium-Term Budget Policy Statement (MTBPS) Mboweni said, “(T)he country’s Aloe ferox is drought resistant, it can survive the harshest of circumstances and can certainly withstand a pandemic. Our little Aloe ferox has survived! It is recovering!” 

Budget 2021 set for 24 February will reflect exactly how far that aloe recovery is – and how long a wait is expected for the re-emergence of the fynbos after the fire. 

Floral analogies aside, Thursdays’ Sona was more of a report back on what Ramaphosa’s administration believes it has delivered since the 15 October 2020 Economic Reconstruction and Recovery Plan announcement and the 21 April 2020 Covid-19 stimulus package that despite the officially proclaimed R500-billion, has never quite added up as much of the stimulus was based on taxes permitted to not be paid and loans that needed approvals

Hard lessons of hunger for the governing ANC – and a multi-billion rand funding hole

But Ramaphosa sharply set out his administration’s four priorities. 

“We must defeat the coronavirus pandemic; that is the primary aim in all we do. And second, we must accelerate our economic recovery. Third, we must implement economic reforms to create sustainable jobs and drive inclusive growth. And finally, we must fight corruption and strengthen the state.” 

More detail emerged in the 6,805-word speech. 

On vaccines, Ramaphosa said the first 80,000 doses of Johnson & Johnson vaccines for healthcare workers would arrive in South Africa next week. Over the next four weeks, another 500,000 vaccines will follow of a total of nine million Johnson & Johnson vaccines. Twenty million Pfizer vaccine doses will be delivered from the end of March 2021; 12 million doses have been secured from the Covax facility. 

On economic recovery, localisation emerged as key. Channelling Trade and Industry Minister Ebrahim Patel, Ramaphosa emphasised master plans for the clothing, chicken, vehicle and sugar sectors alongside 42 products, including edible oils, fruit concentrates and steel products, for sourcing locally. Another 1,000 products are identified in a recent Cabinet-approved SMME-focused localisation policy framework that is also meant to stimulate domestic SMME development. 

On jobs, it emerged that more than 430,000 job opportunities were “supported” by the end of January through the presidential employment stimulus; another 180,000 opportunities are in recruitment. Effectively, it has pushed the employment of class assistants and also focused on early childhood development. 

“As a result of the relief measures that we implemented and the phased reopening of the economy, we expect to see a strong recovery in employment by the end of 2020.” 

On infrastructure, Ramaphosa listed projects under way, such as two Gauteng housing and water infrastructure projects, while road rehabilitation of the N1, N2 and N3 highways are in the making. The R100-billion Infrastructure Fund would also, for example, fund 300,000 student beds in 2021. 

“This will encourage greater investment by the private sector in productive activity. Key to this plan is a renewed commitment from government, business and organised labour to buy local.” 

Given the often overwhelmed state stalling over service delivery, a special mention was given to Operation Vulindlela that brings together the National Treasury and the Presidency, where the infrastructure and project management offices are also located. 

But Sona 2021 offered not much particularly new. As Freedom Front Plus leader Pieter Groenewald pointed out, Ramaphosa had, in 2019, already touted his local is lekker suit to encourage buying local as part of the job creation initiative. 

“We are still there. He just talks; he doesn’t do,” said Groenewald as IFP spokesperson Mkhuleko Hlengwa said, “It felt like 2019, 2020 again.” 

Hlengwa also cautioned against establishing yet more structures such as the proposed national water agency. That was a sign of trying to fix brokenness in the short term rather than dealing with the issue properly. 

DA leader John Steenhuisen welcomed the monthly R350 Covid-19 grant extension to March 2021, and also expressed approval of the scarce skills list release next week. Not so rosy was the lack of detail on the promised renewable energy release and emergency power production. 

“But there was no reform. It’s more power to the state, a lot of ‘soons’, ‘in progresses’ and ‘maybes’,” said the official parliamentary opposition leader. 

ANC Chief Whip Pemmy Majodina was upbeat, who said the president was spot on in giving his account to Parliament. “The president is astute in laying out the details of progress.” 

While governing ANC partner, labour federation Cosatu, welcomed the R350 Covid-19 grant extension and that of the Unemployment Insurance Fund Temporary Employer/Employee Relief Scheme. 

But even as Ramaphosa confirmed healthcare workers vaccination would begin next week after the first 80,000 doses of the Johnson & Johnson vaccine arrived, Cosatu criticised the lack of progress and clarity on timeframes, procurement, logistics and the like. 

“We cannot afford to end 2021 without having reached the 70% population immunity level because the economy cannot sustain periodic shutdowns,” the labour federation said in a statement that also called on the implementation of the National Health Insurance and more details on state-owned enterprises reforms. 

Intellidex analyst Peter Attard Montalto said the Sona was “broadly as expected”, but at odds with economic growth outlook and corporate sentiment. 

Business Leadership South Africa (BLSA) said it agreed with Ramaphosa’s priorities, but called for more clarity on the energy front, including bid window 5 for independent power timelines. It was also right for him to focus his speech on reporting progress rather than making promises,” BLSA said. 

“The momentum he (Ramaphosa) is describing is simply not happening on the ground, which does not serve investors well, as we saw in the disjuncture in rhetoric between miners and the president at the (Mining) Indaba. Nowhere is this seen more readily than in the localisation, master plan and tariff parts of the speech.”

That’s the bit of hope as the government has again extended the State of Disaster to 15 March, the anniversary of the disaster declaration. And 12 days later on 27 March, South Africa is set to mark one year in Covid-19 lockdown. 

So, a bit of something for everyone. Or almost. 

The proof will be in members of Ramaphosa’s administration actually doing their bit — from Home Affairs Minister Aaron Motsoaledi releasing, as promised, the scarce skills lists, and for Mineral Resources and Energy Minister Gwede Mantashe giving details on the additional 11,800MW of renewable energy. 

So it’s back to Ramaphosa’s fynbos analogy. 

“Like a wildfire that sweeps across the mountainous ranges where the fynbos grows, a deadly pandemic (Covid-19) has swept across the world, leaving devastation in its path. And yet, like the hardy fynbos of our native land, we too have proven to be resilient in many ways.” DM

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  • Jon Quirk says:

    “As a result of the relief measures that we implemented and the phased reopening of the economy, we expect to see a strong recovery in employment by the end of 2020.”

    Sums it all up, a President out of touch with reality, trying to delude himself, and clearly just a re-hashed speech from yester-year. We are in 2021 already, Mr President – time to wake up and face reality.

    • Andrew Blaine says:

      With the friends he plays with he has no need of enemies?

    • Charles Parr says:

      Delusional, isn’t it. But one has to have sympathy for a grown man that is still playing with toy trains and Lego buildings. Only in one’s imagination can the TERS scheme that hasn’t worked up to now suddenly start working. And what can one do with a R350 monthly grant. I suppose buy a ticket for a slow train that isn’t going anywhere because there’s no train, no train lines and no electricity. But whoopee Mr Pres we had electricity last night.

  • Coen Gous says:

    This ANC speech, delivered by a lame president, clearly illustrate the troubles that we face. An incapable government, fuelled further by incapable ANC cadres in all all walks of life, is slowly but surely allowing the ship to sail to the rocky cliffs of Cape Town, where it will be crushed with the assistance of a strong south-easter wind. The freedom that citizens craved, has simply turned into agony. A prison sentence has become a better choice to many… free food, free accommodation.

  • Patrick Millerd says:

    South Africa needs leadership and the correct priorities – Covid number one priority and economy number two!! Incredible!!

  • T Mac says:

    Touting upgrades of the N1 etc as government initiatives is questionable seeing as these are funded by tolls… Where are the initiatives to free businesses from the yoke of BEE, the elimination of cadre deployment, and the reduction of the state salary bill?

  • Cedric de Beer says:

    It took the President just 8 minutes to get to the need for “inclusive growth” a term that is never defined. Companies and investors always pocket the lion’s share of growth, increasing inequality. It suchs as a strategy to reduce poverty and inequality. Government and the business sector talk about the need for “structural reform” to attract investment but seldom spell out what that means – nor acknowledge just how jobless most growth is in our highly monopolised economy.

    Giving workers and communities greater shares in the existing assets (as Coca Cola seems to have done recently) already existing the economy is an important way to improve incomes, create assets and inject spending back into the economy. Inclusive growth is a vague strategy to dish out small bits of the national income statement. Shared ownership is a route to using the balance sheet to make faster progress. And its something corporate South Africa can do without waiting for the government which it complains won’t create a “conducive environment”.

    • Peter Dexter says:

      I find your comment confusing. First, the only monopolies we have in the country are failing State-Owned Entities. Agreed there are large companies, that one would more correctly define as oligopolies (unless you accept Bell Pottinger rhetoric funded paid by the Gupta’s to deflect attention from state capture.) The Competitions Commission is very effective in ensuring collusion and monopolies do not exist. (The taxi industry is a possible exception, where collusion is the accepted norm.)
      Inclusive growth will only start when labour laws become more flexible and the government creates an enabling environment for ALL entrepreneurial activity. (Ease of business should be the focus) In countries like ours with massive unemployment, (over-supply of labour) labour-intensive production should be our chosen path. This would result in reduced inequality, poverty and a growing middle class. However, our labour law regime, combined with an extremely hostile and unproductive workforce provides an incentive for EITHER capital intensive production (instead of labour) or the redirection of investment to more investor-friendly jurisdictions. Machines work 24 hours a day, don’t go on strike, don’t DEMAND anything, and don’t intimidate other machines. This capital intensive investment leads to jobless growth – resulting in inequality, poverty and unemployment. (The ANC policies have pushed this agenda ) To exacerbate the issue Eskom is failing, largely due to the above reasons. Then add the pending EWC bill creating additional uncertainty regarding property rights, and one wonders why any company would invest in SA at all, let alone give away part of their asset value to labour? It’s so damned obvious a blind man galloping past on a horse could see the problem.

  • Nick Poree Poree says:

    No mention of the fact that the latest minimum wage for agriculture (if it ever gets to be enforced) will kill off most vegetable and fruit farmers and add to the large proportion of unemployed in rural areas. The “relief measures” for industry is a myth for all except ANC cronies, ask anyone who has tried to access it. No mention of the huge inefficiency of almost every government service in the country despite the vast herd of paid , but inactive civil servants due to lack of operational funds. Go to any provincial department to see the mess, queues of people, empty offices, deteriorating facilities, management by meetings the whole panoply of centralist bureaucracy gone wrong, and then we hear of (strong recovery in employment) someone smoking the fynbos?

  • Cecil van den Bergh says:

    I wonder if he actually reads any newspapers or follow any news reports? We all know exactly what the state of the nation is.

  • Alley Cat says:

    Didn’t bother to watch it and glad I didn’t… Nothing new. Rehash the same old same old and expect that because he made a speech things just happen. Where are the time lines? Detail?
    Gwede Mantashe going to give details of 11 800MW of renewable energy?? REALLY??? WHEN?? By then all investors would have fled to countries that have energy and we won’t need it…
    A pratfall of clowns! Just not sure who the ringmaster of this circus is?

  • Rod H MacLeod says:

    Just to be clear – Fynbos is endemic to a 100-to-200-km-wide coastal belt stretching from Clanwilliam on the West coast to Port Elizabeth on the Southeast coast. That is not “our land”. That is the Western Cape.

  • Frikkie van Kraayenburg says:

    Actions speak loader than words. The autocratic introduction of a Bargaining Council a few days ago for the restaurant industry, adding additional red tape of six more levies that have to be administrated as well as 16% additional costs to their overheads is stupid in the extreme and simply immoral in the current environment. This action is going to drive even more independent restaurants under at the cost of many more jobs.

  • Mark Hammick says:

    “Budget 2021 set for 24 February will reflect exactly how far that aloe recovery is – and how long a wait is expected for the re-emergence of the fynbos after the fire. ”

    The fire of incompetence and corruption, lit, fanned and to which ever increasing volatile fuel has been purposely added by the ANC.

  • Hermann Funk says:

    Whatever good intentions the president may have, implementation of those will fail if execution of these plans is to be carried out by the same incompetent ministers and civil servants who created the mess in the first place.

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