- President Cyril Ramaphosa delivered his fourth state of the nation address on Thursday, during a tense sitting in parliament.
- His speech confirmed a number of initiatives already in the pipeline, but emphasised the liberation of the energy market – including that some municipalities will now be able to buy electricity directly from independent producer.
- He also embraced finance minister Tito Mboweni’s strategy to grow the economy – which came under fire from unions last year.
CAPE TOWN – President Cyril Ramaphosa delivered his fourth State of the Nation (SONA) address on Thursday, two years after he was first elected as president of the country.
The highly anticipated speech was delayed by more than 90 minutes after the Economic Freedom Fighters (EFF) disrupted proceedings, demanding that former apartheid-era president FW de Klerk leave the assembly, and also that public enterprises minister Pravin Gordhan be fired for the load shedding crisis at Eskom.
Ramaphosa delivered the speech in an increasingly difficult environment where rolling blackouts have become the norm, and unemployment grew to the highest levels on record.
He confirmed that economic growth to stimulate job creation would be the main priority of the state going forward.
“Without growth there will be no jobs, and without jobs there will be no meaningful improvement in the lives of our people,” he said.
Here are the key things you need to know about Ramaphosa’s SONA:
Load shedding will continue
Ramaphosa, who said that South Africans have to deal with the legacy of the past and the mistakes his own government made, said load shedding will likely continue in the near future as Eskom completes “fundamental maintenance”.
He, however, said load shedding should be undertaken in a manner that is predictable and minimises disruption and cost to firms and households.
He admitted that load shedding over the past few months has hampered the state’s efforts to rebuild the economy and to create jobs.
“At its core, load shedding is the inevitable consequence of Eskom’s inability over many years – due to debt, lack of capacity and state capture – to service its power plants,” Ramaphosa said.
Private companies will be allowed to produce their own electricity
Ramaphosa confirmed that private companies and mines will be allowed to produce their own electricity above the current 1MW limit, a request the industry has repeatedly made the last couple of years.
There will be no limit on how much power private companies will be allowed to generate, he said.
He said the National Energy Regulator will have to process applications for power generation above 1MW within 120 days.
Additional electricity to be added to the national grid
Ramaphosa said a section 34 Ministerial Determination will be issued “shortly” to give effect to the country’s Integrated Resource Plan 2019, enabling the development of additional grid capacity from renewable energy, natural gas, hydropower, battery storage and coal.
This includes starting to procure emergency power from projects that can deliver electricity into the grid within 3 to 12 months from approval.
He said a new bid window for renewable energy independent power producers (IPPs) will also be opened, and the state will work with producers to accelerate the completion of the previous window projects.
Supplementary power purchase agreements to acquire additional capacity from existing wind and solar plants will also be completed, Ramaphosa said.
Municipalities will finally be allowed to buy their own power from IPPs
Nearly three years since the City of Cape Town launched a court bid to force the minister of energy to allow it to procure its own electricity, South African cities will finally be allowed to buy their own power from independent power producers.
Ramaphosa said this will be limited to municipalities in good financial standing.
A ‘social compact’ will be established to save Eskom
Following a new proposal from Cosatu, which wants the Public Investment Corporation to take over some of Eskom debt, Ramaphosa said that unions, business, community organisations and government have been meeting at Nedlac over the past two weeks to agree on the principles of a “social compact” on electricity.
“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.
“This is a historic and unprecedented development since it demonstrates the commitment of all social partners to take the necessary actions and make the necessary sacrifices to secure our energy needs. Through this compact the social partners seek an efficient, productive and fit-for-purpose Eskom that generates electricity at affordable prices for communities and industries.
“They would like 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,” Ramaphosa said.
Measures to be introduced to cut public sector spending
Ramaphosa said finance minister Tito Mboweni will outline a series of measures to reduce public sector spending and “improve its composition” during the budget speech in two weeks’ time.
“We are engaged with labour and other stakeholders on measures to contain the public wage bill and reduce wastage,” Ramaphosa said.
Sovereign wealth fund and state bank to be established
In line with the ruling African National Congress’ 2019 election promises, Ramaphosa said South Africa will establish a sovereign wealth fund, or investment fund, “as a means to preserve and grow the national endowment of our nation”.
He said the state is also in the process of establishing a state bank as part of its efforts to extend financial services to all South Africans.
He said details of the wealth fund and state bank will be released in Mboweni’s budget speech.
Mboweni’s economic reform plan to be implemented.
Finance minister Tito Mboweni’s “far-reaching economic reform measures” contained in the national treasury’s ‘Economic Transformation, Inclusive Growth and Competitiveness’ paper will be implemented, Ramaphosa said.
Mboweni’s plan contained plans to charge government departments interest on late payments, reducing red tape by 25% in five years, and the better financing of farmers.
Water use licences will be issued within 90 days
Water use licences have previously taken up to 5 years to process, but Ramaphosa said these licences will now be issued issued within 90 days.
Durban port to be overhauled
Ramaphosa said the Southern Hemisphere’s third-largest container terminal, Durban port, will have a “fundamental overhaul” to reduce delays and costs.
Nine new TVET colleges to be built, and a new science university at Ekurhuleni
Ramaphosa said nine new technical and vocational education and training (TVET) college campuses will be built in Sterkspruit, Aliwal North, Graaff Reinet and Ngqungqushe in the Eastern Cape, and in Umzimkhulu, Greytown, Msinga, Nongoma and Kwagqikazi in KwaZulu-Natal the next year.
He confirmed plans to establish a new University of Science and Innovation in Ekurhuleni in Gauteng, the only city which does have a university in South Africa.
Robotics at schools
In line with his 2019 State of the Nation Address, Ramaphosa said vocational specialisation subjects have been introduced at 550 schools, and 67 schools are now piloting the occupational stream.
He said coding and robotics will be introduced at grades R to 3 in 200 schools in South Africa in 2020, with a plan to implement it fully by 2022.
More police in tourism areas
Ramaphosa said the South African Police Service (SAPS) will increase visibility at identified tourist attraction sites.
Tourism Safety Monitors will also be trained and a reserve police capacity established to focus on these attraction sites, he said.
Specialised policing units strengthened
Specialised units from SAPS and the National Prosecuting Authority will be mandated to combat crimes by criminal groups that extort money from construction and other businesses.
He said anti-gang units will be further strengthened, with priority given to the Western Cape, Eastern Cape, Gauteng and Free State.
Hammanskraal to get ‘crime detection university’
Following the graduation of 5,000 police trainees in 2019, Ramaphosa said 7,000 new police trainees will be trained in 2020 to strengthen the police services.
A special crime detection university will be built in Hammanskraal to improve the quality of general and specialised SAPS investigations, he said.
Domestic violence act to be amended
After reprioritising R1.6 billion in spending to address gender-based violence, Ramaphosa said the domestic violence act will be amended to better protect victims in violent domestic relationships.
He said another law will be passed to tighten bail and sentencing condition in cases that involve gender-based violence.
He said the sexual offences act will also broaden the categories of sex offenders whose names must be included in the national register for sex offenders.
A national anti-corruption strategy to be launched
Aside from the Zondo commission into state capture continuing its work, Ramaphosa said a joint government and civil society working group has been charged to develop a national anti-corruption strategy and implementation plan,
He said the strategy will be launched by the middle of the year. The report by the commission of inquiry into the Public Investment Corporation will also be released to the public in the next few days, he said.
Infrastructure projects over R700 billion over 10 years to be built
Nearly two years after announcing the establishment of an Infrastructure fund, Ramaphosa said the fund has finalised the list of “shovel-ready” projects worth over R700 billion in the next ten years, which will be funded from both government and non-government contributions.
They include projects in areas such as student accommodation, social housing, independent water production, rail freight branch lines, embedded electricity generation, municipal bulk infrastructure, and broadband roll-out, he said.
“The cranes and yellow equipment that we have longed to see across the landscape of our country will once again soon be an everyday sight,” Ramaphosa said.
He said R64 billion will also be spent by the state, and “at least” another R64 billion from the private sector, over the next few years to build student accommodation.
Ramaphosa said 37,000 rental apartments for low-income households, which could leverage as much as R9 billion of private investment, will start construction this year.
And the construction of the Umzimvubu Dam in the Eastern Cape will also start, he said.
Smart city to be built at Lanseria
Ramaphosa said a new smart city in Lanseria, with space for between 350,000 to 500,000 people, will be constructed at Lanseria in Gauteng.
He said the city will not only be smart and 5G network ready, but will be a leading benchmark for green infrastructure across the continent and internationally.
The first cohort of Presidential Youth Service, and 1% of budget to youth unemployment
One percent of the national budget will also be set aside to deal with the high levels of youth unemployment in South Africa, he said.
“This will be through top-slicing from the budget, which will require that we all tighten our belts and redirect resources to address the national crisis of youth unemployment.”
Details will be announced by Mboweni at the Medium Term Budget Policy Statement near the end of the year, Ramaphosa said.
Funding 1,000 young entrepreneurs in the next 100 days
Starting this week, Ramaphosa said the National Youth Development Agency and the Department of small business development will provide grant funding and business support to 1,000 young entrepreneurs in the next 100 days.
He said this forms part of a more ambitious programme to assist 100,000 young entrepreneurs over the next 3 years to access business skills training, funding and market facilitation.
IDC to spend R10 billion on women-owned businesses
Ramaphosa said over the next five years, the Industrial Development Corporation will spend R10 billion of its own and partner funding on women empowered businesses.
He said a new platform called SheTradesZA will also be launched to assist women-owned businesses to participate in global value chains and markets.
State will be forced to buy from local companies
Ramaphosa said the state will designate 1,000 locally produced products that must be procured from small to medium companies in South Africa.
He said the Procurement Bill will soon be presented to Parliament as part of the state’s efforts to empower black and emerging businesses and advance radical economic transformation.
Industry master plans completed
Ramaphosa said industry masters plans for vehicle manufacturing, clothing and textiles, poultry, steel and sugar have been completed, to save close to 200,000 jobs.
He said within the next two weeks the state will set a new poultry import tariff adjustment to support the local industry.
Effective from Thursday, Ramaphosa also said new regulations published in the Government Gazette will enable investigation and action against abuse of buyer power and price discrimination.
Free data for South Africans
Ramaphosa said competition authorities are working on a resolution to force mobile operators to enact “deep cuts” to data prices across pre-paid monthly bundles.
He said additional discounts targeted at low-income households, a free daily allocation of data and free access to educational and other public interest websites are also being planned.
Spectrum to be released by the end of 2020
After several years delay, Ramaphosa said spectrum regulator ICASA has undertaken to conclude the licensing of high demand spectrum for industry via auction before the end of 2020.
Because of additional requirements, the licensing of the wireless open-access network – or WOAN – is likely to completed during the course of 2021, he said.
700,000 state-owned land to be released for agriculture production
Ramaphosa said the state will release 700,000 hectares of state-owned land for agricultural production in 2020.
The government also stands ready, following the completion of the Parliamentary process to amend section 25 of the Constitution, to table an Expropriation Bill that outlines the circumstances under which expropriation of land without compensation would be permissible, he said.
He said a new beneficiary selection policy for land allocation now includes compulsory training for potential beneficiaries before land can be allocated to them.
Drought resistant seeds to be developed
Ramaphosa said the state is working with the Agricultural Research Council and other scientific and agricultural bodies to develop drought mitigation strategies that focus on developing drought-resistant seeds, planting and storing fodder, removing of invasive plants and management strategies to prevent soil degradation.
Ramaphosa said the state will open up and regulate the commercial use of hemp products in 2020 to provide opportunities for small-scale farmers.
He said a policy on the use of cannabis products for medicinal purposes will also be formulated to build the industry in line with global trends.
The regulatory steps will soon be announced by the relevant ministers, he said.
Sign language to become SA’s 12th official language
Ramaphosa said after the department of basic education recognised South African Sign Language as a home language in 2018, and the recommendation by the Parliamentary Constitutional Review Committee, sign language is set to become the country’s twelfth official language.
District-based model to be expanded to 23 districts
Ramaphosa said the state’s new district-based model of development which seeks to take an integrated approach to service delivery will be expanded to 23 districts in 2020.
He said residents of the Mamusa Municipality in North West have already seen this approach in action, where the district development model was effectively utilised to clear illegal dumping sites, refurbish pump stations to stop sewage spilling in the streets, build roads and lay water pipes, and provide water and toilets to local schools.
Ministers to sign performance agreements
Ramaphosa said to strengthen the capacity of the state and increase accountability, he will be signing performance agreements with all ministers before the end of this February.
He said these agreements, which are based on the targets contained in the Medium-Term Strategic Framework, will be made public so that South Africans can hold those who they elected into office to account.
“We see these performance agreements as the cornerstone of a new culture of transparency and accountability, where those who are given the responsibility to serve – whether as elected office bearers or public servants – do what is expected of them,” Ramaphosa said. Business Insider