Economic growth tops SONA

SONA 2017: “The Year of Oliver Reginald Tambo: Unity in Action Together Moving South Africa Forward”. Economic growth and transformation as well as education were priorities in President Zuma’s speech.

Zuma
President Jacob Zuma participates in The New Age SABC Business briefing held in Cape Town on 10 February 2017, unpacking some of the key messages and actions from the previous evening’s State of the Nation Address. (Photo: GCIS)

CD Anderson

Economic growth reaching 1.7%, the government using its buying power to grow SMMEs, expanding tertiary access to the “forgotten middle” and a renewed emphasis on maths and science teaching were the core of President Jacob Zuma’s 2017 State of the Nation Address.

At the heart of true reconciliation was the reform of ownership of land and control of the economy, he said. The lag in appropriation of land for landless black African rural populations had resulted in a decline in the number of households involved in agriculture – there had been a 19% drop from 2.9-million in 2011 to 2.6-million in 2016. The Expropriation Act has been referred back to parliament because the president believes it will not pass constitutional muster.

The government would encourage land claimants to hold on to their land instead of accepting payments. This, President Zuma said, perpetuated landlessness among black Africans especially. “Over 90% of claims are currently settled through financial compensation which does not help the process at all. It perpetuates dispossession. It also undermines economic empowerment.

“Government has committed itself to support black smallholder farmers. I received a memorandum from the African Farmers Association of South Africa who say the year 2017 must be the year of the commercialisation of the black smallholder farmers. Indeed, government will implement a commercialisation support programme for 450 black smallholder farmers.”

Radical socio-economic transformation

The State of the Nation Address marked the beginning of a new chapter of radical socio-economic transformation, said the president, who highlighted the gap between the earnings of white households and black – a differential of five. It mirrored ownership of the nation’s economy.

“The skewed nature of ownership and leadership patterns needs to be corrected. There can be no sustainability in any economy if the majority is excluded in this manner. In my discussions with the business community, they accepted these transformation imperatives.”

Beyond legislation, the government would be using its purchasing power to drive transformation and economic growth. “The state spends R500-billion a year buying goods and services. Added to this is the R900-billion infrastructure budget. Those budgets must be used to achieve economic transformation.”

New regulations have been gazetted compelling big contractors to share at least 30% of work with black-owned businesses. The aim is to grow small enterprises, build township and rural economies and promote local industrial development.

Education

The coming year had been dedicated to OR Tambo, the late ANC president and maths and science teacher. Inspired by his example, South Africans should work together to build the united, democratic, non-sexist, non-racial and prosperous South Africa of which he had dreamed. The cornerstone of that dream was education.

“This gives our children dignity. A total of 173 inappropriate structures have been eradicated since 2011. In total, 895 new schools now provide a conducive learning environment for our children.”

The most disruption over the last two years had occurred at tertiary institutions as students demanded access to affordable education. The government had heard their demands and had listened to the multitude of solutions offered.

It had covered the increases in 2016 tuition fees, settled outstanding debts of students in the NSFAS programme and would now expand the threshold for funding students, raising it from household incomes of R122,000. This new funding threshold would cover the “missing middle” of students – those whose parents earned too much to qualify for government aid, but not enough to afford tertiary study.

“Honourable members and fellow South Africans, students and their parents should understand that the needs for services like water, sanitation, early childhood development and good public transport have to also be addressed, alongside access to quality higher education and training. But our commitment to finding sustainable solutions to the funding of the social wage in general, and education, in particular, is unwavering.”

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