#SONA2016: Focus on economy

Prsident Jacob Zuma delivers his State of the Nation Address in the joint sitting of the house in Parliament, Cape Town, 11/02/2016, Elmond Jiyane, GCIS

Prsident Jacob Zuma delivers his State of the Nation Address in the joint sitting of the house in Parliament, Cape Town, 11/02/2016, Elmond Jiyane, GCIS

Published Feb 11, 2016

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Johannesburg - President Jacob Zuma’s much-delayed State of the Nation Address on Thursday evening emphasised how important economic growth was to creating jobs and resolving current issues.

Zuma also spoke at length about the steps the state would take to ensure every cent was spent wisely and fruitless and wasteful expenditure – long a bugbear of the Auditor-General – was cut out. Among the measures he announced was that government and state-owned entities would cut back on delegation sizes, and there would be restrictions on conferences, catering and entertainment.

This, Zuma hinted, would be a government-wide rule as he invited state-owned enterprises to follow suite.

Zuma got to the meat of his address more than an hour later than scheduled as Members of Parliament – from opposition parties, although the Economic Freedom Fighters was the most vocal – argued about points of order over the imposition of tighter rules. Tighter rules were set to avoid a repeat of last year’s debacle when proceedings were interrupted over cellphone blocking devices.

2015 saw the Democratic Alliance stand up and leave en masse, while the EFF was forcefully ejected. This year, repeated attempts to get SONA off the ground were only successful after the EFF’s call “Zupta must fall” were finally silenced. This was in response to Zuma’s alleged close-knit relationship to the Gupta family, which has just indirectly acquired a former Glencore coal mine.

The president noted a resilient and fast-growing economy is at the heat of government’s agendas as a fast-growing economy delivers jobs, and allows citizens to earn wages and businesses to make profits.

For many, Zuma’s 2016 SONA was the most challenging he would face as the country will host local government elections amid a background of an economy that is stalling, and not expected to grow more than a percent this year by the World Bank.

There have also been calls for the president to change policies so that the country could grow at a faster pace. In the lead up to the annual opening of Parliament, Zuma had met with captains of industry to chart a way forward for economic growth. He said business had been listened to, and several interventions such as trimming the red tape around doing business would be addressed.

 

Inclusive economy

Zuma noted, putting the economy at front and centre, would allow the government to increase the social wage and provide services such as free basic services, and education “faster, and in a more sustainable manner”.

The president conceded that the economy had faced difficulties since the global crisis of 2008, and had embarked on an aggressive infrastructure programme to stimulate growth.

Among the interventions SA was implementing in the face of muted global growth, which had weighed on emerging markets especially hard, would be to encourage tourism through a R100 million investment, and ensure that state-owned enterprises operated efficiently, and if they were not needed, they would be closed down. Scarce skills would also be more easily allowed into the country, vowed Zuma. He added small and medium companies needed to be aided so the success rate of new ventures could be improved.

Zuma noted it was vital that SA improved its credit ratings as the country was in danger of being downgraded to junk status, which would make it more difficult to raise capital internationally to improve the country, especially in infrastructure.

The president said improving the economy was everyone’s job, and cutting back would result in small-term pain that would enable the country to grow for inclusive growth. Despite the challenges, he said SA remained an attractive investment destination, which must be marketed and requires commonality from business, labour and government.

IOL

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