SA State of the Nation shifts focus to local government
June 18, 2014, 4:16 am

Members of the South African National Defence Force prepare for the State of The Nation Address (SoNA) outside Parliament in Cape Town [GCIS]

This is a follow-through of the shift of the highly-respected Pravin Gordhan from the Finance Ministry to the Ministry of Cooperative Governance and Traditional Affairs.

This may have seemed like a demotion, but for the ruling African National Congress (ANC) it is a key appointment, as the opposition Democratic Alliance made inroads in the May 7 elections at provincial level and service delivery will have to be improved before the 2016 local government elections.

“You will recall that we stated in the inauguration address that the economy will take centre-stage,” Zuma said when he announced the new cabinet.

“We would like our people’s experience of local government to be a pleasant one. We have listened to the complaints and proposals of South Africans over the past five years, relating to the performance of municipalities. I would like to share with you now, our plan of action to revitalise local government,” he said in the SONA.

One of the ways that local government will be strengthened is by finalising the government’s Integrated Urban Development Framework by July 30 2014.

“It will provide a new deal for South African cities and towns. It will set out a policy framework on how the urban system in South Africa can be reorganised so that cities and towns can become inclusive, resource efficient and good places to live in over the next 20 to 30 years,” Zuma said.

Zuma once again reiterated the urgent need to jolt the country back to growth.

“It remains our strong belief that the most effective weapon in the campaign against poverty, is the creation of decent work, and that creating work requires faster economic growth. We have set a growth target of 5 per cent by 2019. To achieve this, we will embark on various measures and interventions to jump-start the economy,” he noted.

The slow growth in South Africa according to Zuma had been caused in part by the global economic slowdown and secondly by domestic conditions, such as the prolonged and at times violent strikes, and also the shortage of energy.

“Given the impact of the untenable labour relations environment on the economy, it is critical for social partners to meet and deliberate on the violent nature and duration of the strikes,” he said.

A strike in the platinum mining sector that started in the last week of January and has still not ended, was one of the main factors why the South African economy contracted in the first quarter 2014 for the first quarterly contraction since the second quarter 2009.

State-owned electricity utility Eskom is years behind schedule on its coal-fired power stations of Medupi and Kusile. The first unit of the 4 800 Megawatt (MW) Medupi power station was originally scheduled for commercial operation in 2011, but will now only be operational in the first quarter 2015.

To address future energy requirements beyond 2020 the government will finalise the procurement process for Coal Three and have a fourth procurement window of its highly-successful renewable energy programme. The first units from the first window have already been linked to the national grid.

“In addition to our major energy security interventions, we will continue to implement the successful National Infrastructure Plan, under the supervision of the Presidential Infrastructure Coordinating Commission, throughout the country. During the past five years, we invested about one trillion rand in new infrastructure to provide water, energy, transport, sanitation, schools and clinics and internet connections to our people. Over the next three years, we will spend 847 billion rand on the infrastructure and several projects are to be started or completed. The construction of Mzimvubu Dam in the Eastern Cape will continue, and also the raising of the wall of Clanwilliam Dam in the Western Cape. During the next five years the bulk of the construction work on Phase 2 of the Lesotho Highlands Water Project will be completed. In the next five years, we will finish building more than 60 MeerKat dishes and start building the first 100 Square Kilometre Array dish antennas,” Zuma noted.

Turning to international trade relations, Zuma highlighted the importance of the BRICS partnership. The Sixth BRICS summit will be held in Brazil next month.

“We will continue to deepen economic development, trade, and investment partnerships with the BRICS through the work of the BRICS Contact Group for Economic and Trade Issues,” he said.

Bureau for Economic Research senior economist Hugo Pienaar said the speech was encouraging as it focussed on local government and youth employment.

“It was good news to hear that 133 000 new jobs have been created through the employment tax incentive scheme in the private sector in the first five months. We need to build on that going forward, as most jobs have been created by the public sector over the past few years. The focus on local government, which is where service delivery takes place for most citizens, is very welcome. The target of achieving 15 million tourists by 2017 is ambitious from only 9.6 million last year, but I believe it is doable given the weak rand and our safety record relative to other tourist destinations,” he said.

He said the government needed to turn talk into action.

“One would have liked to hear more concrete stuff than just building more schools on how the government plans to improve educational outcomes, as this is critical for long-term growth,” he concluded.

Zuma said the government will increase the number of Grade 12 learners who can gain entrance to university from 172 000 in 2013 to 250 000 in 2019. In addition, 12 training and vocational education colleges will be built to expand the technical skills mix in the country.

Helmo Preuss in Pretoria for The BRICS Post