Pretoria - President Jacob Zuma has moved to assure South Africans, uneasy about the current unfavourable economic conditions, that they should not be despondent, but rather the country should work together to turn the situation around.
In his State of the Nation Address on Thursday night, watched by millions of people, President Zuma reiterated that the tough global and domestic conditions should propel "us to redouble our efforts, working together as all sectors."
He emphasised government’s commitment to continue to create the correct investment support infrastructure to attract foreign investments into the country.
“We have had fruitful meetings with business, including the high level meeting with CEOs…we have heard the suggestions from the business community on how we can turn the situation around and put the economy back on a growth path,” President Zuma said.
He announced that governmmoent was developing a ‘One Stop Shop/Invest SA’ initiative to signal that South Africa is truly open for business. Government would fast-track the implementation of this service, in partnership with the private sector.
SA a victim of global economic crisis
President Zuma reminded South Africans in his one-hour 30 minutes speech, that the country, like many other developing economies, had been a victim of the global economic downturn.
“Our reality right now is that global growth still remains muted. Financial markets have become volatile. Currencies of emerging markets have become weak and they fluctuate widely.
“Because our economy is relatively small and open, it is affected by all of these developments. Our economy is also affected by domestic factors such as the electricity constraints and industrial relations which are sometimes unstable,” he said.
South Africa’s economy was also affected by domestic factors such as the electricity constraints and industrial relations which are sometimes unstable.
The IMF and the World Bank predict that the South African economy will grow by less than one per cent this year. The lower economic growth outcomes and outlook suggest that revenue collection will be lower than previously expected.
The President also acknowledged that South Africa seems to be at risk of losing its investment grade status from ratings agencies.
“If that happens, it will become more expensive for us to borrow money from abroad to finance our programmes of building a better life for all, especially the poor.”
He urged South Africans to take advantage of the exchange rate as well as the recent changes of visa regulations, to boost inbound tourism. SA Tourism would invest R100 million a year to promote domestic tourism, encouraging South Africans to tour their country, he said.
Progress is being made
Reflecting on the progress that has been made in the past few years, President Zuma mentioned among others that state-owned freight company Transnet has built rail infrastructure which has enabled the country’s mines to move massive bulk of commodities through the ports to markets around the globe.
Road agency Sanral has built some of the best roads in Gauteng and in many parts of the country and these “make us” the envy of many parts around the globe.
The Trans Caledon Tunnel Authority has constructed dams of varied capacities, thus making it possible for South Africans to have access to safe drinking water.
“Eskom, in spite of the challenges, still manages to keep the economy going, against all odds. Our development finance institutions such as the Industrial Development Corporation (IDC) or Development Bank of Southern Africa and others have provided finance for infrastructure, various industries and agricultural businesses without fail, even in the aftermath of the global financial crisis.”
Nine point plan
President Zuma also reflected on the progress of the nine point plan he announced last year, saying amongst others that progress has been made to stabilise the electricity supply. There has been no load shedding since August last year, which has brought relief for both households and industry alike.”
In the 2015 SONA, the president announced the plan to help steer the economy out of the woods. The plan aims to boost economic growth and job creation and serve as a response to the gloomy global economic situation which impacts South Africa’s goal to grow its economy by five percent in 2019. It consists of, among others, revitalisation of the agriculture and agro-processing value-chain; promoting beneficiation, unlocking the potential of small business and the energy challenge.
On Thursday, President Zuma said government has invested R83 billion in Eskom which has enabled the utility to continue investing in Medupi and Kusile, while continuing with a diligent maintenance programme.
Additional units from Ingula power station will be connected in 2017, even though some of them will begin synchronisation this year.
The multiple bid windows of the Renewable Independent Power Producer Programme have attracted an investment of one hundred and R94 billion.
“This initiative is a concrete example of how government can partner with the private sector to provide practical solutions to an immediate challenge that faces our country”.
The President said this year government will select the preferred bidders for the coal independent power producer. – SAnews.gov.za
