President Cyril Ramaphosa’s maiden state of the nation address has been generally welcomed by business‚ but with some caveats.
The CEO Initiative welcomed the president’s commitment to achieving policy certainty and consistency‚ as well as the commitment to work with labour and business on a number of initiatives to stimulate growth and address the significant unemployment challenge.
Jabu Mabuza‚ Convenor of the CEO Initiative said:[tooltip id=”4500c2f113202943ff1ae30d00c9d4ac”] [/tooltip]“Policy certainty and consistency are fundamental foundations for attracting the investment that our country needs to achieve inclusive growth. The business community maintains its willingness to invest in an environment that is conducive to achieving sustainable economic output.”
He added:[tooltip id=”4500c2f113202943ff1ae30d00c9d4ac”] [/tooltip]“We have always maintained that a commitment to fiscal discipline is of the utmost importance if we are to protect our economy from outside shocks and retain an investment grade credit rating. In this regard‚ we acknowledge the president’s assurance that the implementation details for free tertiary education and the National Health Insurance – two items that are bound to have a significant impact on the country’s already constrained fiscus – will be clarified in the Budget Speech next week.”
It was critically important for South Africa to redress its many social challenges‚ but this had to be done in a responsible manner‚ and balanced with the need to stabilise the country’s debt profile and close the fiscal gap‚ Mabuza said.
On the whole‚ however‚ the CEO Initiative was encouraged by the positive tone of the Sona‚ he said.[tooltip id=”4500c2f113202943ff1ae30d00c9d4ac”] [/tooltip]“With certainty‚ stability and consistency we are confident that the country should see the much-needed improvement in investment that will stimulate growth and ultimately create jobs.
“Business is committed to continue working with labour and the government in realising these goals which should set the country on the course for sustained success.”
The Banking Association of SA said the speech would go a long way to creating policy certainty and encouraging domestic and foreign investment‚ necessary for inclusive economic growth and job creation.
It added that after a long period of corruption that had characterised the previous presidency‚ it was relieved by Ramaphosa’s commitment to “build a society defined by decency and integrity‚ that does not tolerate the plunder of public resources‚ nor the theft by corporate criminals of the hard-earned savings of ordinary people”.
“We must urgently correct the erosion of the capacity of the state and institutions of governance‚ so that we can effectively achieve the programme set out by the president. Mr Ramaphosa’s commitment to look at the structure‚ number and size of national departments and to ensure a capable state is welcome.
“South African banks are ready to respond to the call for business to work with other stakeholders towards the recovery of the economy and country. We will play our part in the proposed investment conference and the work groups and commissions on pressing national issues like economic growth‚ youth employment and the digital industrial revolution. These will help formulate practical policies that can be implemented and help build an economy geared for our current realities‚” said Basa MD Cas Coovadia.
He noted that the president had also committed to abide by the rulings of the Constitutional Court‚ especially those regarding the SA Social Services Agency and the distribution of social grants‚ saying that this commitment to the rule of law was essential for business and the social development of the country.
“South African banks have repeatedly said that that they are willing and able to ensure that social grants are legally distributed to their beneficiaries‚ within the terms of the Constitutional Court hearings. We hope that the way is now clear for a transparent‚ honest engagement between the banks and the Sassa and Department of Social Development‚” Coovadia stated. Agri SA said the Sona was a frank admission of the challenges negatively impacting on the morale of South Africans and the drivers which were critical to take the nation forward.
“Agri SA therefore wholeheartedly supports the economic solutions outlined in the State of the Nation Address to turn the country around and to create a future of hope‚ social cohesion and prosperity for all‚” Dan Kriek‚ president of Agri SA‚ stated.
“We enthusiastically applaud the practical steps outlined to ensure policy certainty‚ reduce government departments‚ grow the local economy‚ attract investments‚ boost the manufacturing sector and grow the small business environment‚” Kriek added.
However‚ Agri SA was highly concerned with what it called the contradictory statements related to “acknowledging agriculture as the biggest contributor the past quarters in terms of economic growth and job creation‚ whilst in the same breath calling for the expropriation of land without compensation”.
“Not only does it subvert the letter and spirit of Section 25 of our National Constitution‚ but it also entrenches the perception that the governing party has no regard for the founding principles of our newly founded democracy‚” the organisation said.
“The question also remains: From whom will land be expropriated and to whom will it be given? Such populist statements will do more harm than good and contradicts the underlying theme of the State of the Nation Address to grow the sector through investment to unleash its fullest potential.
“Agri SA therefore appeals to the President to rather desist from such populist rhetoric and to engage with the commercial agricultural industry to find amicable solutions to the land question‚” Agri SA said.
Agri SA executive director Omri van Zyl added that the organisation was developing its own land transformation plan that would be commercially driven and aim to increase national production significantly without having to change the Constitution.
“Undermining the notion of private ownership and still expecting the private sector to enthusiastically embrace partnerships between themselves and the state will not happen” Van Zyl cautioned.
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