Highlights of the State of the Nation Address

President Jacob Zuma delivered the State of the Nation Address (SoNA) to Parliament in Cape Town on Thursday, 9 February 2017.

The President mentioned that in this 23rd year of freedom, government’s mission remained the quest for a united, democratic, non-sexist, non-racial and prosperous South Africa.

“Guided by the National Development Plan (NDP), we are building a South Africa that must be free from poverty, inequality and unemployment,” he said.

He said while the global economic environment remained uncertain, indications were that the country had entered a period of recovery, with an anticipated economic growth rate of 1.3 percent in 2017 following an estimated 0.5 percent growth rate in 2016.

The President acknowledged that the economy was still not growing fast enough to create much-needed jobs, especially for the youth.

Job creation

The focus areas of the Nine-Point Plan to reignite the economy to be able to create much-needed jobs include industrialisation, mining and beneficiation, agriculture and agro-processing, energy, small, medium and micro enterprises (SMMEs), managing workplace conflict, attracting investments growing the oceans economy and tourism.

Cross-cutting areas such as science and technology, water and sanitation infrastructure, transport infrastructure and broadband roll-out have also been added.

Boosting economic growth

The interaction between government, business and labour, known as the CEO Initiative, has been able to address some domestic challenges.

As a result, the country successfully avoided credit rating downgrades, which would have had a significant impact on the economy.        

Stable labour market

South Africa’s labour market environment is showing signs of stability, owing to cooperation by social partners.

 Unity in action was demonstrated following the conclusion of the agreement on the national minimum wage and on measures to stabilise labour relations.

Resolving the energy challenge

By February 2017, nearly seven million households had been connected to the grid and now have electricity.

 The successful execution of Eskom’s Build and Maintenance programmes helped to ensure stability and an end to load-shedding. Work is continuing to ensure energy security. Renewable energy forms an important part of the energy mix, which also includes electricity generation from gas, nuclear, solar, wind, hydro and coal.

 Government is committed to the overall Independent Power Producer Programme and is expanding the programme to other sources of energy, including coal and gas, in addition to renewable energy.

 Eskom will sign the outstanding power purchase agreements for renewable energy in line with the procured rounds.

Water and sanitation

Government is working hard to ensure reliable bulk-water supply in the various areas of the country to support economic growth while increasing access to vulnerable and rural municipalities.

In an effort to curb high water losses, which in some municipalities far exceed the national average which is at 37 percent, about 10 000 unemployed youth are being trained as plumbers, artisans and water agents. More will be recruited this year to reach the total of 15 000. Municipalities have been urged to support the War on Leaks Programme.

 

 

Road infrastructure

The South African National Roads Agency Limited has started with the planning phase of the R4.5 billion project to upgrade the Moloto Road.

The Moloto Road and a railway line are currently under construction for the purpose of ensuring the safety of road users and also bringing to an end the accidents that claim many lives.

During 2016, South Africa signed a cooperation agreement with the People’s Republic of China (PRC) to build the Moloto Rail Development Corridor.

School infrastructure

Government continues to build modern schools, and is replacing mud structures and other inappropriate buildings through the Accelerated Schools Infrastructure Delivery Initiative.

A total of 173 inappropriate school structures have been eradicated since 2011. In total, 895 new schools now provide a conducive learning environment for school children.

Promoting investment

To promote investment, government has established InvestSA, an investment one-stop shop, nationally and will open provincial centres in KwaZulu-Natal, Gauteng and the Western Cape. Affected government departments have been requested to avoid undue delays and unnecessary red tape, such as the issuing of licences to visas that should make it easy to do business in South Africa.

 Educational achievements

The results in the Trends in International Mathematics and Science Study and the Southern and East African Consortium for Monitoring Educational Quality show that the performance of South African learners is improving. Among the participating countries, South Africa has shown the largest improvement of 87 points in mathematics and 90 in science.

Science and technology

Since South Africa, supported by its eight African partners (Botswana, Ghana, Kenya, Madagascar, Mauritius, Mozambique, Namibia and Zambia), won the bid to host the Square Kilometre Array (SKA) telescope, significant progress has been made in building this mega science project and reaping its benefits.

 Together with its precursor, the MeerKAT telescope, the SKA project continues to make important contributions to socio-economic development in South Africa.

 The Department of Science and Technology is implementing a technology localisation strategy, which has ensured that the R2 billion MeerKAT telescope is constructed with 75 percent local content.

This has led to job creation in the Northern Cape and diversification of the economy through the creation of artisan and maintenance jobs, and the promotion of science as a career of choice.

“The Year of Oliver Reginald Tambo: Unity in Action Together Moving South Africa Forward.”

Operation Phakisa

The Operation Phakisa Big Fast Results Methodology in the ocean economy, health, education and mining sectors – which was launched in 2014 to unlock growth in implementing the NDP – is proceeding well.

 The South African Navy (SAN) also participates in the Operation Phakisa project and is preparing to host the government garage concept for all state-owned vessels in Simon’s Town near Cape Town, including the maintenance and repair of government-owned vessels, through the newly established SAN/Armaments Corporation of South Africa/Denel partnership.

Tourism

Government has identified tourism as a key job driver. Tourist arrival numbers for January to November 2016 increased to nine million, an increase of just over a million arrivals from 2015. This represents a 13 percent growth in tourist arrivals.

Poverty-alleviation programmes

Government runs effective poverty alleviation programmes such as the Expanded Public Works Programme (EPWP). The EPWP has since 2014 created more than two million work opportunities and the target is to create six million work opportunities by the end of March 2019. More than a million of the work opportunities have been taken up by the youth.

Many families benefit from social grants, which now reach close to 17 million people, mainly older persons and children.

 During the 2015/16 financial year, more than 61 000 work opportunities were created through environmental programmes such as Working for Water, Working for Wetlands, Working on Fire and Working for Ecosystems. More than 60 percent of the beneficiaries were young people.

 

Social development

17 million – people receiving social grants, mainly older persons and children.

Socio-economic transformation

Government has acknowledged the slow pace of transformation in the workplace and the implementation of affirmative action policies, as required by the Employment Equity Act, 1998 (Act 55 of 1998).

 In terms of the 2015/16 information submitted to the Employment Equity Commission, the representation of whites at top management level amounted to 72 percent while African representation was at 10 percent. The representation of coloureds stood at 4.5 percent and Indians at 8.7 percent.

 At the level of gender at senior management level, males remain dominant at 67.6 percent and females at 32.4 percent.

 Government is undertaking a new chapter of radical socio-economic transformation to correct the skewed nature of ownership and leadership patterns which exclude the majority.

 This includes legislation, regulations, licensing, budget and procurement as well as Broad-based Black Economic Empowerment charters to influence the behaviour of the private sector and drive transformation.

Procurement

The state spends R500 billion a year buying goods and services, in addition to the R900 billion infrastructure budget, to achieve economic transformation.

 New regulations making it compulsory for big contractors to subcontract 30 percent of business to black-owned enterprises have been finalised and were gazetted on 20 January 2017.

 Through such regulations and programmes, government will be able to use the state buying power to empower small enterprises and rural and township enterprises, designated groups and to promote local industrial development.

However, two key challenges being faced are the high levels of concentration in the economy, and the collusion and cartels, which squeeze out small players and hamper the entry of young entrepreneurs and black industrialists.

 The competition authorities have uncovered the cartels and punished them for breaking the law.

 Legislation to criminalise the cartels and collusion came into effect on 1 May 2016 and it carries jail sentences of up to 10 years.

  During 2017, the Department of Economic Development will bring legislation to Cabinet that will seek to amend the Competition Act, 1998 (Act 89 of 1998). It will, among others, address the need to have a more inclusive economy and to de-concentrate the high levels of ownership and control in many sectors. The legislation will be tabled for consideration by Parliament.

Housing

Government is actively involved in the property sector and has provided more than four million houses since 1994.

 The housing sector in South Africa is valued at approximately R7 trillion, with the subsidised sector being valued at R1.5 trillion.

 However, less than five percent of the sector is owned or managed by black people and Africans in particular. The Department of Human Settlements will publish a draft Property Practitioners Bill for public comment with the purpose of establishing a more inclusive, representative sector, towards radical economic transformation.

 Government will this year also address the increasing delays and backlogs in registration and issuing of title deeds to beneficiaries of housing projects funded by the capital subsidy.

 The development of the Black Industrialists Programme will ensure the direct involvement of black people in business and owning factories. The programme has since inception supported more than 22 entrepreneurs.

Programmes to modernise harbours

The Department of Public Works will invest approximately R100 million this year on critical capital and maintenance programmes to modernise harbours. The programmes will also continue generating revenue from letting state-owned harbours and coastline properties, which will benefit black-owned SMMEs.

Information and communications technology (ICT)

Government will also continue to pursue policies that seek to broaden the participation of black people and SMMEs, including those owned by women and the youth, in the ICT sector.

 The lowering of the cost of data is uppermost in policies and plans of government.

The Department of Public Works will invest approximately R100 million this year on critical capital and maintenance programmes to modernise harbours.

“The Year of Oliver Reginald Tambo: Unity in Action Together Moving South Africa Forward.”