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2022 SONA Shines Light on Social Compact

February 11, 2022

The Presidency

The social partners are drawing up a social compact designed to grow South Africa’s economy, create jobs and combat hunger.

President Ramapahosa announced this last night while delivering the 2022 State of the Nation Address in the Cape Town City Hall.

The president added that the social partners – government, labour, business and communities – had started discussions “on what trade-offs are needed and what contribution we will each need to make”.

The plan is to finalise a comprehensive social compact within 100 days.

The president highlighted that the “path we choose now will determine the course for future generations”.

“That is why we are taking steps to strengthen our democracy and reaffirm our commitment to a Constitution that protects us all”, he said.

The president declared that South Africans are in agreement that fundamental reforms are needed to revive economic growth.

“There is a need both to address the immediate crisis and to create conditions for long-lasting stability and development”, he said.

The president confirmed that the Economic Reconstruction and Recovery Plan remains the common programme to rebuild South Africa’s economy.

Priorities remain overcoming the Covid-19 pandemic; rolling out infrastructure; increasing local production; implementing an employment stimulus and expanding energy generation capacity.

As regards the Covid-19 pandemic, the president indicated that government is now ready to enter a new phase in managing the pandemic.

He declared that government intends ending the national state of disaster as soon as measures under the National Health Act and other legislation are in place to contain the pandemic.

Other key developments highlighted include:

• Amendments to Electricity Regulation Act approved yesterday by cabinet for public comment – designed to enable a competitive market for electricity generation and the setting up of an independent state-owned transmission company;
• Digital migration to be completed by the end of March 2022 – ICASA to start auctioning high frequency communications spectrum in approximately three weeks;
• Comprehensive review of work visa system underway – looking at new visa categories such as a start-up visa and a remote working visa;
• Draft legislation drawn up for the establishment of the National Water Resources Infrastructure Agency – to be published for comment soon;
• The policy and regulatory framework for industrial hemp and cannabis to be reviewed – hemp and cannabis sector has the potential to create more than 130,000 new jobs;
• Labour market regulations for smaller businesses to be reviewed to allow for more hiring of workers while continuing to protect workers’ rights;
• New loan guarantee scheme for small businesses to be introduced – will involve development finance institutions and non-bank SME providers in offering finance, expand the types of financing available and adjust eligibility criteria to encourage greater uptake;
• Business Act under review to reduce the regulatory burden on informal businesses;
• Team set up in the presidency to reduce red tape in the business environment;
• Further measures to address the sale or export of scrap metal in the pipeline to address damage on infrastructure;
• Employment Tax Incentive – value to be increased and criteria expanded to encourage hiring by smaller businesses – detail to be provided in Budget 2022;
• R350 Social Relief of Distress Grant extended until the end of March 2023;
• System to protect whistleblowers to be strengthened – detailed review of all applicable legislation and a comparative study of other jurisdictions to strengthen whistleblower protection underway;
• Presidential SOE Council preparing recommendations on state-owned entities to be retained, consolidated or disposed of; and
• National Security Strategy to be developed based on recommendations by Expert Panel on 2021 unrest.