Cape Town – The vision for a much stronger state-controlled South African economy took centre-stage in President Jacob Zuma’s 2017 State of the Nation Address delivered in Parliament on Thursday evening.
The speech, which was delivered amid unprecedentedly tight security inside and outside of Parliament and a spat between ANC members and the EFF and the DA that saw the two opposition parties leaving the house, was scant on detail about South Africa’s controversial nuclear deal and the future of the troubled state-owned enterprises.
Zuma, however, was at pains to point out how exactly government will use every means available to it – regulation, legislation, black economic empowerment charters and the national budget – to reach its goal of a radically transformed economy in which black South Africans will have greater ownership.
The most controversial plan was perhaps Zuma’s mention of new draft legislation that will target the highly concentrated areas of the economy.
Although Zuma didn’t go into detail, it can be assumed that me meant South Africa’s financial services sector, which will soon be the subject of a round of public hearings in Parliament where a number of stakeholders will provide input regarding how they see the sector being transformed.
The proposed legislation, which Zuma said would help “de-concentrate” certain sectors will be drafted by the Department of Economic Development and will soon make its way to Cabinet and Parliament for deliberation.
Early in his speech, Zuma lauded the collaborative efforts between business leaders, labour and government, which helped stave off a credit ratings downgrade last year.
He steered clear of criticising ratings agencies to the same extent he had in Parliamentary sessions last year, but did say toward the end of his speech that he was pleased with the fact that the Brics countries managed to establish a new ratings agency through which this grouping can assist each other economically.
While South Africans were eager to hear how government intends to proceed on procuring a nuclear build programme, Zuma instead committed to South Africa’s continued investment in renewable energy as part of its overall energy mix.
This comes after Eskom has for months refused to issue final budget quotes to preferred bidders in Round 4 and the Round 4 extension of the outstanding Renewable Energy Independent Power Producer Procurement Programme (REIPPP).
Zuma reassured the country that renewable energy formed an important part of the country’s energy mix, which would also include gas, nuclear, hydro and coal.
Zuma admitted that too many South Africans are without jobs – some for years – and that the South African economy was not growing fast enough to create the jobs required to reduce persistently high levels of unemployment which reached more than 27% last year.
The economy is expected to expand by 1.3% in 2017, having growth at meagre 0.5% in 2016.Read Fin24's top stories trending on Twitter: Fin24’s top stories