17 June 2014
President Jacob Zuma has pledged to tackle inequality in South Africa, tabling a series of measures, ranging from job creation to youth development and infrastructure investment, in order to address the challenge over the next five years.
In the first State of the Nation address of the new administration, delivered to Parliament in Cape Town on Tuesday evening, Zuma called for the economy to take centre stage in the government’s transformation agenda, which includes:
- Embarking on radical social and economic transformation;
- Investing in infrastructure;
- Promoting small business;
- Fighting wage inequality; and
- Growing foreign investment.
“The economy takes centre stage in this programme,” Zuma said. “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 percent by 2019. To achieve this, we will embark on various measures and interventions to jump-start the economy.”
Much of the President’s speech then focused on South Africa’s energy security, and issues facing the youth, workers and the middle class.
Measures to assist the youth
Zuma said the government would introduce further measures to speed up the employment of young people, consistent with the Youth Employment Accord.
These would include expanding the number of internship positions in the public sector, with every government department and public entity being required to take on interns for experiential training.
“The private sector has responded positively to the introduction of the employment tax incentive. In only five months, there are 133 000 employees who have benefited and 11 000 employers who have participated in the incentive scheme.”
Transformation of the energy sector
Also in Zuma’s address were proposals to radically transform the energy sector, to develop a sustainable energy mix that comprises coal, solar, wind, hydro, gas and nuclear energy.
“The transformation will require structural changes in the manner in which government departments, affected state-owned companies and the industry as a whole address the energy challenges.”
Plans on the financing of the country’s next large coal-fired power station, Coal 3, will be speeded up so that the procurement process can commence.
“The energy plan also calls for the injection of capital and human resources into the energy sector. We will also need to identify innovative approaches to fast-track procurement and delivery by government in the energy sector.”
Investing in infrastructure
Zuma said the government would continue to drive investment in infrastructure.
“During the past five years, we invested about R1-trillion 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 R847-billion on infrastructure, and several projects are to be started or completed.”
Construction of Mzimvubu Dam in the Eastern Cape will continue, as well as 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, Zuma said, while more than 60 MeerKat dishes, and the first of 100 Square Kilometre Array antennas, would be built in the next five years.
‘A much better place to live in’
Zuma also gave an account of the country’s achievements over the past five years, mainly in the areas of education, infrastructure, water provision, sanitation and electrification.
“South Africa is a much better place to live in than it was in 1994, and that the lives of millions of our people have improved. However, as the National Development Plan and the Presidency Twenty Year Review highlight, the triple challenges of poverty, inequality and unemployment continue to affect the lives of many people.”
Zuma said the government was determined to work with the private sector to remove obstacles to investment. “We would like to see the private sector showing as much confidence in the economy as the public sector.”
The government will also continue to roll out its Industrial Policy Action Plan. This will help increase domestic production by requiring the state to procure 75% of goods and services from South African producers.
“We will utilise the renewable energy sector, the manufacturing of buses, Transnet’s R50-billion locomotive contracts and Prasa’s passenger rail projects, among others, to promote local content and boost growth.”
At the same time, the government will continue to promote regional economic development and industrialisation through the creation of Special Economic Zones around the country.
Black economic empowerment
Zuma also promised to improve the implementation of the amended Broad-Based Black Economic Empowerment Act and the Employment Equity Act in order to transform the ownership, management and control of the economy.
Through policy interventions, the government will also promote more employee and community share ownership schemes and boost the participation of black entrepreneurs in the re-industrialisation of the economy.