President Cyril Ramaphosa has admitted that the country is facing serious challenges but said action was being taken to address them. The President delivered South Africa’s 2020 State of the Nation Address in Parliament, in Cape Town, last night.
Load shedding and Eskom
“The load shedding over the last few months has had a debilitating effect on our economy and our people. At its core, load shedding is the inevitable consequence of Eskom’s inability over many years – due to debt, lack of capacity and state capture – to service its power plants.”
Ramaphosa said that in order for Eskom to undertake the fundamental maintenance necessary to improve the reliability of supply, load shedding will remain a possibility for the immediate future. He said as Eskom works to restore its operational capabilities, government will be implementing measures that will fundamentally change the trajectory of energy generation in our country. These measures include to rapidly and significantly increase generation capacity outside of Eskom.
“We will put in place measures to enable municipalities in good financial standing to procure their own power from independent power producers,” Ramaphosa said. Municipalities such as the City of Cape Town, business leaders and, lately, the ANC, have backed a plan to allow municipalities to be less reliant on Eskom.
“Over the next few months, as Eskom works to restore its operational capabilities, we will be implementing measures that will fundamentally change the trajectory of energy generation in our country,” Ramaphosa said.
As part of Ramaphosa’s planned steps for the state to become less reliant on the troubled power utility, the president said that the Integrated Resource Plan of 2019 with be given effect to allow for the development of additional grid capacity from renewable energy, natural gas, hydro power, battery storage and coal.
“We will initiate the procurement of emergency power from projects that can deliver electricity into the grid within three to 12 months of approval,” Ramaphosa said. He said they will allow more independent power producers to supply energy to the grid.
The expropriation of land without compensation also remained key, said Ramaphosa, adding measures would be taken to implement the decision after Parliament has concluded all the issues. Ramaphosa emphasized that land expropriation would be done with caution as agriculture is one of the industries with the greatest potential for growth.
“Government stands ready – following the completion of the parliamentary process to amend section 25 of the constitution – to table an expropriation bill that outlines the circumstances under which expropriation of land without compensation would be possible. To date, we have released 44 000 hectares of state land for the settlement of land restitution claims, and will this year release around 700 000 hectares of state land for agricultural production,” Ramaphosa said.
The president also announced that this year his government would implement key recommendations of the presidential advisory panel on land reform and agriculture to accelerate land redistribution, expand agricultural production and transform the industry.
“We are prioritizing youth, women, people with disabilities and those who have been farming on communal land and are ready to expand their operations for training and allocation of land. A new beneficiary selection policy includes compulsory training for potential beneficiaries before land can be allocated to them,” he said.
Ramaphosa said serious action will have to be taken to deal with SOEs who are drowning in debt with the National Treasury providing guarantees of more than R570 billion.
“This year, we are moving from the stabilization of state-owned enterprises to re-purposing these strategic companies to support growth and development.
“After years of state capture, corruption and mismanagement, we are working to ensure that all SOEs are able to fulfill their developmental mandate and be financially sustainable,” the president said. “In consultation with the Presidential SOE Council, we will undertake a process of rationalization of our state-owned enterprises and ensure that they serve strategic economic or developmental purposes.
The extent of capture, corruption and mismanagement in SOEs is best demonstrated at South Africans Airways, which was placed in business rescue late last year. The business rescue practitioners are expected to unveil their plans for restructuring the airline in the next few weeks.”
The train system
Ramaphosa also committed to turning around the Passenger Rail Agency of South Africa to fix the commuter rail network and said a plan for restructuring South African Airways would be unveiled in the next few weeks, and said government’s successes included pushing back against corruption.
Ramaphosa said they will increase their fight against gender-based violence. “We will amend the Domestic Violence Act to better protect victims in violent domestic relationships and the Sexual Offences Act to broaden the categories of sex offenders whose names must be included in the National Register for Sex Offenders and we will pass a law to tighten bail and sentencing conditioning cases that involve gender-based violence,” said Ramaphosa.
One per cent of South Africa’s budget would be set aside to assist with youth employment, Ramaphosa said during his State of the Nation Address .
“This will be through top slicing from the budget, which will require that we all tighten our belts and redirect resources to address the national crisis of youth unemployment,” he said. The initiative would be prioritized when Finance Minister Tito Mboweni delivered his medium-term budget policy statement later in the year.
Ramaphosa said the initiative was one of six “priority actions” spanning five years to reduce youth unemployment. The initiative would start immediately he said, under the banner of the Presidential Youth Employment Intervention. Ramaphosa said the six actions would ensure that the capabilities of every young South African was “harnessed”, enabling them to contribute to the growth of the country.
“We are building cutting-edge solutions to reach young people where they are – online, on the phone and in person. This will allow them to receive active support, information and work readiness training to increase their employability and match themselves to opportunities.”
He said that starting this month, government was launching five prototype sites in five province “that will grow to a national network reaching three million young people through multiple channels”. The network would allow young people to receive active support, information and work readiness training to increase their employability and match themselves to opportunities.
“We are fundamentally changing how we prepare young people for the future of work, providing shorter, more flexible courses in specific skills that employers in fast-growing sectors need. We are developing new and innovative ways to support youth entrepreneurship and self-employment,” Ramaphosa said.
“We are scaling up the youth employment service and working with TVET colleges and the private sector to ensure that more learners receive practical experience in the workplace to complete their training. We are establishing the first cohort of a presidential youth service program that will unlock the agency of young people and provide opportunities for them to earn an income while contributing to nation building.”
As part of the intervention, he said, the National Youth Development Agency and the department of small business development would provide grant funding and business support to 1 000 young entrepreneurs in the next 100 days, “starting today”.
He said that while police statistics showed that violent crime, rapes and murders have not gone down, improved detective methods would be effected through the training of officers. Ramaphosa said: ” Anti-Gang Units will be further strengthened, with priority given to the Western Cape, Eastern Cape, Gauteng and Free State.
“Following the graduation of 5 000 police trainees last year, 7 000 new police trainees have been enlisted this year to strengthen local policing. To improve the quality of general and specialized SAPS investigations, we are establishing a Crime Detection University in Hammanskraal,” the president said.
Ramaphosa also told the nation about his plans for hemp and cannabis. “This year we will open up and regulate the commercial use of hemp products, providing opportunities for small-scale farmers; and formulate a policy on the use of cannabis products for medicinal purposes, to build [the] industry in line with global trends”, Ramaphosa said.
A number of Relocation Africa team members were able to attend a British Chamber round-table, to discuss SONA 2020. Key opinions and take-aways from those in attendance (not our own stances on the issues) were as follows:
- There appears to be a faction within the ANC pushing back against the President, and this creates hurdles for his agenda for South Africa. However, a full-scale rebellion against him is highly unlikely.
- An independent panel may be considered to remove the Public Protector.
- There are still limitations in existence against independent power producers (IPPs) putting electricity back into the national grid, to take pressure off Eskom.
- The budget speech may need to announce a cut in public sector wages in order to avoid a status downgrade by Moodies.
- It was disappointing to see many promises not having deadlines attached to them in the SONA proceedings.
- Overall, the President’s speech reassured many South Africans, who are hoping to see if the economy can develop sufficiently in 2020.
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