SONA 2017: The Home Stretch Begins

Thursday, 9 February, 2017 - 08:13

Indications are that the policy line will be held on boosting economic growth, fighting unemployment and poverty and effecting land reform

When President Jacob Zuma on Thursday delivers his 2017 State of the Nation Address (SONA), indications are that the policy line will be held on boosting economic growth, fighting unemployment and poverty and effecting land reform. The language may morph into “radical socio-economic transformation” and “reigniting economic growth”, if the recent ANC and Cabinet lekgotlas are anything to go by. But it’s what takes place away from the parliamentary podium that holds the clues about what’s really going on.
 
While SONA marks the start of the parliamentary calendar, the president’s speech on government’s priorities is the outcome of the Cabinet lekgotla that is informed by the preceding ANC lekgotla, which in turn is informed by the governing party’s January 8th Statement that typically sets the political tone for the year.
 
A presidency statement ahead of last week’s Cabinet lekgotla said the gathering would “deliberate strongly on efforts to reignite economic growth, working with other social partners, taking forward the achievements of the past year in promoting unity in action in protecting the economy and advancing growth in a difficult economic environment”.
 
Days earlier, the ANC lekgotla statement said central to radical socio-economic transformation was “an effective state that is decisive in its pursuit of structural change”, including “a fundamental shift from a pure capitalist state to a state-managed developmentalist economy underpinned by a developmental public service”.
 
This is where it may get interesting, particularly in relation to the banks and financial sector as the recent ANC lekgotla touted the establishment of “developmental financial institutions” as part of the intended accelerated radical socio-economic transformation.
 
Such transformation was, according to the ANC lekgotla statement, “a fundamental change in the structure, systems, institutions and patterns of ownership and control of the economy in favour of all South Africans, especially the poor, the majority of whom are African and female”.
 
Already it has emerged that Luthuli House hosted at least one meeting at the start of this year to discuss transformation in the financial services sector, part of the governing party’s economic transformation sub-committee of the national executive committee (NEC).
 
And the parliamentary finance committee has scheduled public hearings on the banking and financial institutions in mid-March. It was to that hearing that the Black Business Council (BBC) president Danisa Baloyi and Progressive Professionals Forum (PPF) boss Mzwanele Manyi, who wrote to Zuma not to sign the draft law after it was passed by Parliament, were directed to take complaints of racism and unaccountability. These claims were made during public hearings on a technical aspect of warrantless searches in the Financial Intelligence Centre Amendment Bill, for which Zuma returned the Bill to Parliament. Amid heated discussions in which the Banking Association of South Africa dismissed claims by the BBC and PPF, finance committee chairperson Yunus Carrim cautioned there remained deep-seated issues.
 
“If you don’t deracialise banking, it will be done for you.”
 
Next month the North Gauteng High Court in Pretoria starts hearing arguments on a declaratory order upholding non-interference in banks sought by Finance Minister Pravin Gordhan. The ministerial turn to court came amid allegations made by the politically-connected Gupta family whose Oakbay investments accounts were closed last year. Cabinet on April 13, 2016 established a task-team to meet financial institutions – this subsequently emerged at an official public briefing on that meeting – but Mineral Resources Minister Mosebenzi Zwane was left in the wind when Cabinet distanced itself from his statement that there would be a commission of inquiry into banks on September 1, 2016. Zwane, who come under repeated public scrutiny over links to the Guptas dating back to his days as Free State agriculture MEC, later said he issued the statement in his personal capacity.
 
All this unfolds amid a sustained narrative from some circles that white monopoly capital is bent on obstructing transformation and undermining government in South Africa. This narrative dovetails to the one popular in the security cluster, as publicly advanced by State Security Minister David Mahlobo and Police Minister Nkosinathi Nhleko, of outside forces and foreign interests, including non-governmental organisations, seeking to destabilise South Africa.
 
SONA 2017 follows local government elections that saw the ANC lose control in Tshwane, the seat of the executive, Johannesburg, South Africa’s economic power house, and Nelson Mandela Bay Metro, the economic heartland of the Eastern Cape.
 
SONA 2017 also comes amid jockeying already under way in the lead-up to the ANC’s national elective conference in December. With just about the whole Cabinet and deputy ministers also members of the ANC national executive committee (NEC), or highest decision-making body between conferences, will the lines between party and state be blurred? After the ANC in its January 8th Statement dedicated the year to its president OR Tambo, who led it in exile and would have turned 100 this year, government, according to its websites, adopted the SONA 2017 theme “The Year of Oliver Reginald Tambo: Unity in Action Together Moving South Africa Forward”.
 
This year on the SONA day, the ANC is hosting what is billed as a “people’s assembly” on the Grand Parade in central Cape Town. A poster of Zuma standing before a desk, flanked next to South Africa’s flag and that of the ANC, urge people to join from 15:00. By that time wide-ranging road restrictions will be in place as this year’s security measures have hit unparalleled levels and are described by opposition parties as draconian.
 
Two Western Cape ANC officials indicated Zuma would address this people’s assembly, but a senior national party leader denied this. ANC national spokesperson Zizi Kodwa in a statement said various build-up activities would culminate in the people’s assembly “where at a public viewing of the State of the National Address, our people will gather to listen as Comrade President Jacob Zuma outlines interventions to shape our collective future for the better”.
 
South Africa finds itself in a tough economic environment. The harshest drought in living memory has led to the escalation of food prices and reports that poor South Africans are increasingly relying on cheap, and unhealthy, starch and fat.
 
The prospect of a ratings downgrade, which would increase the cost of government borrowing, has not disappeared, although concerted work across government, business and labour last year staved it off. Unemployment in the third quarter of 2016 stood at 36.3% on the expanded definition that includes discouraged work seekers, or those who have given up looking for jobs. Economic growth has been stagnant, hovering around the 1% mark. And the deep-seated concern remains whether, given the controversy over service providers, the South African Social Security Agency (Sassa) will from April 1 be able to deliver social security grants to 17-million poor South Africans.
 
Past SONA announcements have been a mixed bag. Two years ago Zuma announced the Nine Point Plan, dealing with investment, consultation, energy and the like. Although an argument can be made that the plan’s goal of resolving electricity constraints is being achieved as Eskom says it’s bringing more capacity online, electricity tariff hikes have meant South Africans either no longer can afford power, or are cutting down on usage. Progress in mineral beneficiation remain unclear, although the Industrial Policy Action Plan (IPAPA), a long-established policy brought under the Nine Point Plan, is paying off, particularly in the motor industry, which has seen several tens of billions of rand of private investment. The ocean economy appears slow to take off: a flagship project, the Saldanha Bay harbour, has seen little concrete development, although two bulk carrier vessels were registered in Port Elizabeth and one in Cape Town where a fuel storage facility was launched with an investment of R660-million.
 
After the SONA 2016 presidential promise that government would curb misspending, the Auditor-General in November 2016 announced that irregular expenditure had ballooned to R46.36-billion in national and provincial departments. That was an 80% increase from the year before, largely due to “continued non-compliance with supply chain management legislation”. And progress remains unclear on the streamlining of state-owned entities (SOEs). Despite a publicly-stated focus on good governance and financial viability, several SOEs, such as SAA and the South African Post Office, remain in financial and/or governance turmoil.
 
For the past few years SONA has run a fairly predictable course: words on the tough economic headwinds largely due to the 2008 global financial crisis, a run-down of government successes largely centred on the internationally praised antiretroviral treatment regimen, and a list of projects to be pursued by ministers and their departments Will SONA 2017 be different? 

  • Marianne Merten is an Independent Writer and Journalist. This article first appeared in the Daily Maverick. 

Photo courtesy: NAPTOSA

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