By Lehlohonolo Lehana.
President Cyril Ramaphosa said on Thursday that his government would launch another phase of reforms to try to lift economic growth above 3%.
“We want a nation with a thriving economy, an economy that benefits all to create this virtuous cycle of investment growth and jobs, we must lift economic growth to above 3%,” Ramaphosa said during state of the nation address.
The central bank’s most recent forecast is that the economy will grow 1.8% this year.
Thursday’s annual address is the first under a coalition government that was formed last year after Ramaphosa’s African National Congress (ANC) lost its parliamentary majority in an election for the first time since the end of apartheid in 1994.
Ramaphosa said an immediate focus for the government was to enable struggling state companies like Eskom Transnet to function optimally. Another priority was investments in infrastructure, the president added.
Modernised Industrial Policy
The President announced that a modernised and comprehensive industrial policy would be finalised this year, focusing on opportunities in localisation, diversification, digitisation and decarbonisation.
In addition, he said a transformation fund, worth R20-billion a year over the next five years would be set up, to fund black-owned and small business enterprises, while the regulations of the Public Procurement Act would be fast-tracked to facilitate business opportunities for women, youth and persons with disabilities.
The importance of expanding the country’s infrastructure also received prominence, as did government’s desire to attract private sector investment into areas previously dominated by State-owned companies, including the ports, railways, and powerlines.
Particular emphasis was given to water infrastructure, with Ramaphosa acknowledging that “people in our cities, towns and villages are experiencing more and more frequent water shortages”.
He said decisive actions would be taken to resolve the crisis, including the creation of ringfenced municipal water utilities.
National Health Insurance (NHI)
Ramaphosa says that the government is forging ahead with the state’s National Health Insurance scheme, making no mention of any changes to the laws.
The president said that the NHI will provide quality healthcare for all and save lives.
Therefore, the state will “proceed with the preparatory work for the establishment of the NHI,” he said.
This includes developing the first phase of a single electronic health record, preparatory work to establish Ministerial Advisory Committees on health technologies and health care benefits, and an accreditation framework for health service providers.
The president’s speech briefly mentioned the NHI, sidestepping reports of changes to the NHI laws that would ensure the continuation of medical aid and the role of the private sector in the scheme.
Instead, Ramaphosa stuck to the main themes that the government has been repeating over the years as it pushed the controversial scheme through – such as reducing inequality and saving lives through fair treatment.
“The NHI will save many lives by providing a package of services that include, for example, maternal and newborn care and services for people living with HIV, those with TB, and those suffering from non-communicable diseases such as heart disease, cancer and diabetes,” the president said.
“Our most immediate priority is to strengthen the health system and improve the quality of care.”
The president said that a vital part of this goal is the modernisation, improvementand maintenance of existing health facilities and construction of new hospitals and clinics.
A number of hospitals are under construction or undergoing revitalisation.
These include the Limpopo Central Hospital and the Siloam District Hospital in Limpopo, the Dihlabeng Regional Hospital in Free State, the Bambisana District Hospital and Zithulele District Hospital in Eastern Cape, and the Bophelong Psychiatric Hospital in North West.
“Other projects are at various stages of design and development. This includes the replacement of three existing old central hospitals, three new central hospitals, five new district hospitals, five community health centres and a new psychiatric hospital,” he said.
To improve patient experience, he said the state is putting more emphasis on reducing waiting times, cleanliness and staff attitudes in public health facilities.
Ramaphosa elected to skip on mentioning any developments around the NHI Act and the contestations within the Government of National Unity.
Specifically, there was no mention of possible plans to remove certain sections of the law that have proven to be the most controversial, such as effectively removing medical aids from the picture.
Planning, Monitoring and Evaluation Minister Maropene Ramokgopa confirmed that parties within the GNU reached a compromise that could ease fears about the future of private medical schemes under the NHI.
These talks were later confirmed by the parties involved, though there has been no official announcement of potential changes or formalised processes
Basic Income Grant (BIG)
Ramaphosa has once again said that the Social Relief Distress (SRD) grant will be expanded to create a more sustainable source of income.
Established in 2020, the SRD grant was used to provide millions of South Africans with access to a small amount of funds (originally R350) to protect them from extreme poverty.
The grant has been expanded to R370 and supports over 10 million recipients in the country.
Ramaphosa said that the SRD grant will be used as a basis to create a more sustainable source of income for unemployed people.
“The Social Relief of Distress Grant is as an essential mechanism for alleviating extreme poverty.
“We will use this grant as a basis for the introduction of a sustainable form of income support for unemployed people,” he said.
South Africa’s unemployment rate is currently over 32%, making it one of the highest in the world.
This is not the first time that Ramaphosa has said that the SRD grant would be expanded, with the President repeating similar statements at the 2024 SONA.
Although many critics have stated that the grants create a “dependent society,” many have stated that the grants are essential to protect millions from malnutrition.
Concrete plans to turn the SRD into a permanent basic income grant have been few and far between.
National Treasury poured ice on talk of a basic income grant for South Africa in late 2024, stating that it would cost the economy over R400 billion per year, which is unaffordable without large tax increases.
With the basic income grant potentially reaching 35 million people between 18 and 60 years old, the programme could reach a cost of R400 billion per year.
Reactions
The Economic Freedom Fighters (EFF) leader Julius Malema suggested the president was wasting time with his speech.
“There is no plan or accountability. He uses this platform to waffle. He says he will create jobs, but he does not say where or how. He says he will develop infrastructure, but where and how. There is no plan, only utterances to pass the time.
“He knows he will not be challenged on it by those he is in coalition with”.
Malema referenced Ramaphosa’s previous promises to build houses and said, “He is not a man who follows through on what he promises at Sona.
“We are still talking about water [after all these years that he has been president]. He is good at throwing around numbers during these speeches but we don’t see the money.”
The uMkhonto weSizwe Party (MKP) through its spokesperson, Nhlamulo Ndhlela accused Ramaphosa of attempting to privatise water and electricity infrastructure through the establishment of privately funded entities.
“The speech is a disaster. He talks about local municipality. What he is doing, he is privatising water and electricity. He is setting up entities and we have spoken out about this because we could see this was another way of privatising water and electricity by introducing grants to fund these entities. Meanwhile, these are actually loans from IMF (the International Monetary Fund) and the World Bank.”
Many on social media felt that he was again delivering hollow promises.
Fadiel Adams of the National Coloured Congress was less impressed by the speech.
“We are very disappointed and we’ve got a feeling it’s only going to be worse,” Adams said.
“Certain municipalities want the devolution of police powers. They want investigating powers until their Mayco’s offices get raided. So it makes you think? But then on that note, you can throw 100,000 policemen at the Cape Flats today, nothing will change while crime intelligence is rotten.”