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2020 SONA Shines Light on Inclusive Growth

February 14, 2020

The Presidency

Delivering the 2020 State of the Nation Address (SONA) in parliament last night, president Ramaphosa admitted that government cannot solve South Africa’s economic challenges on its own.

He added that what has been achieved up to now is the result of role-players working together.

“Even if we were to marshal every single resource at our disposal, and engage on a huge expenditure of public funds, we would not alone be able to guarantee employment to the millions of people who are out of work”, he said.

The president highlighted that government has, over the past two years, “worked to forge compacts among South Africans to answer the many challenges before us”.

He declared that the 2020 SONA focuses on inclusive growth.

“It is about the critical actions we take this year to build a capable state and place our economy on the path to recovery.”

The president indicated that 2020 is the year for fixing fundamentals, pursuing critical areas of growth and ensuring excellence in planning and implementation in government.

In terms of Eskom and the energy supply challenges, the president confirmed that load-shedding “will remain a possibility for the immediate future” as Eskom undertakes fundamental maintenance necessary to improve the reliability of supply.

“Where load-shedding is unavoidable, it must be undertaken in a manner that is predictable and minimises disruption and the cost to firms and households.”

The president outlined measures that will be taken to enhance energy generation in South Africa separate from Eskom.

Measures include the issuing of a Section 34 Ministerial Determination to give effect to the Integrated Resource Plan 2019 allowing for the development of additional grid capacity from renewable energy, natural gas, hydro power, battery storage and coal; initiating the procurement of emergency power from projects that can deliver electricity into the grid within 3 to 12 months from approval; the National Energy Regulator to process all applications to produce electricity for own use above 1MW within the prescribed 120 days; bid window 5 of the renewable energy IPP to be opened and municipalities in good financial standing to be allowed to procure their own power from independent power producers.

The president declared that the social partners – trade unions, business, community and government – are “committed to mobilising funding to address Eskom’s financial crisis in a financially sustainable manner”.

The plan is to do this in a manner that does not put workers’ pensions at risk and that does not compromise the integrity of the financial system.

As regards the challenges around climate change, the president indicated that the Draft Climate Change Bill, which provides a “regulatory framework for the effective management of inevitable climate change impacts by enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change – and identifying new industrial opportunities in the green economy” will be finalised.

In the fiscal space, the president indicated that Budget 2020 will outline a series of measures to reduce spending and improve its composition.

Government is “engaged with labour and other stakeholders on measures to contain the public wage bill and reduce wastage”.

The president added that achieving sustainable public finances will “ultimately require us to address structural challenges in the economy that raise the cost of living and doing business”.

Initiatives in the pipeline include the setting up of a sovereign wealth fund and a state bank that will extend financial services to all South Africans.

Other measures highlighted in SONA 2020 include the rationalization of state owned enterprises; the introduction of amendments to the Domestic Violence Act to better protect victims in violent domestic relationships and the Sexual Offences Act to broaden the categories of sex offenders whose names must be included in the National Register for Sex Offenders; proposed legislation to tighten bail and sentencing condition in gender-based violence cases; the designation of 1000 locally produced products to be procured from SMMEs; the tabling of the Draft Public Procurement Bill designed to empower black and emerging businesses and advance radical economic transformation; the amendment of section 25 of the constitution and the tabling of a Draft Expropriation Bill that sets down the circumstances under which expropriation of land without compensation would be permissible.