State of the Nation Address 2013 News

President Jacob Zuma’s State of the Nation address last night was a scorecard of government achievements over the last 12 months: nearly 200,000 households added to the electricity grid, 675 kilometres of electricity transmission lines rolled out, 85% (or 12,1 million) of households with access to electricity, 98 new schools and R47 billion invested in renewable energy projects.
 

He commenced his address by bemoaning the country’s lack of economic growth, with GDP expected to average 2,5% this year, down from last year’s 3,1%. "We need growth rates in excess of 5% to create more jobs," said Zuma.
 

This came in the same week that Adcorp released its latest employment index, showing a 3,2% drop in employment – with a loss of more than 51,000 jobs – in the year to January 2013. A few weeks earlier, government announced it was increasing the minimum farm wage of R105 per day, prompting the lay-off of thousands of farm workers. Foreign investment has been in flight mode since the Marikana massacre last August, when 34 miners lost their lives. Then Anglo Platinum announced it was shutting down most of its Rustenburg operations, igniting heated exchanges between government and mining houses, as well as threats to review their mining licences.
 

Consulting Engineers South Africa (Cesa) president Naren Bhojaram told Business Day this week that President Zuma should move beyond platitudes about corruption and spell out how he planned to tackle it. He said perceptions about SA with respect to business integrity and corruption "is deteriorating at an alarming rate. The immediate but unfortunate consequence of this is the imminent driving away of foreign investors," Bhojaram is reported to have said.
 

All this is likely to frustrate government’s New Growth Path, which targets 5 million new jobs by 2020, setting an ambitious target of reducing South Africa's unemployment rate from 27 percent in 2011 to 6 percent by 2030 by creating 11 million new jobs.

No new shift in direction

If business was hoping for a radical shift in favour of economic liberalism, it will be disappointed. Zuma reaffirmed his unwavering belief in the virtue of government intervention: "The past two years have demonstrated that where the state intervenes strongly and consistently, it can turn around key industries that face internal or external threats as has happened in our manufacturing sector.

"We have seen the revitalisation of train and bus production in South Africa, largely because of the drive for local procurement."

The clothing and textiles industry had stabilised after 15 years of falling employment, and several initiatives aimed at promoting youth employment had been implemented.

The President touched on the Marikana massacre, and the range of efforts underway to bring stability and certainty to the mining sector, adding that the "nationalisation debate was laid to rest in December at the ruling party’s national conference."

Zuma pointed to other positive news: life expectancy in South Africa had increased from 56 to 60 years, infant mortality is down, and the planned launch in 2014 of the National Health Insurance Fund.

As far as land claims are concerned, the government was determined to shorten the time it takes to settle claims, and would adopt the "just and equitable" as opposed to the "willing buyer, willing seller" principle in the expedition of claims.

Getting tough on corruption

Then Zuma touched on the subject of corruption. He had, he said, signed 34 proclamations dealing with corruption and criminal proceedings were instituted against 203 people in 67 priority cases under investigation since September 2012. The Asset Forfeiture Unit had seized R541 million in corrupt assets.

This was not the definitive and shrill stand against tender and other forms of corruption that many hoped to hear. Lawson Naidoo of the Council for the Advancement of the South African Constitution last year estimated that tender corruption could cost up to 20% of the country’s GDP. That’s a staggering figure that cries out for action. Bhojaram told Business Day that government was refusing tender assessment reports from professional reports, making tenders easier to manipulate. This, he said, smelt of corruption. Zuma touched briefly on the Competition Commission investigation into corruption in the construction sector, but made little effort to answer the growing clamour over tender corruption.

In response to the Marikana massacre, Zuma measures were now being put in place to ensure that any incidents of violent protest are "acted upon, investigated and prosecuted."

None of this is likely to appease jittery investors. Zuma will be watching anxiously the launch of Ramphele Mamphele’s new political party next week, which some have speculated will peel away a significant percentage of the ANC youth and middle class.

There were the usual bromides to peace in Africa, though no mention of the R1,2 billion cost over five years of stationing troops in Mali. Zuma spoke of narrowing the wealth gap, but even here the enthusiasm was absent. The R206 million cost of upgrades to his mansion at Nkandla knocks the steam out of any crusading verve he may have wanted to put on for show.

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