Reaction to Ramaphosa’s state of the nation speech

President Cyril Ramaphosa delivered his 2022 state of the nation address (SONA) on Thursday evening (10 February), looking to inspire the country with words of hope and deliver a plan of action to get the country’s economy moving again.

The speech ran for 110 minutes and touched on a number of major topics including the current state of disaster, power woes including load shedding, the unemployment crisis, corruption, social unrest, and the revival of the economy.

Given the length and breadth of the president’s speech, the response to his address has been suitably mixed.

Many lauded the detail given to some of the plans to address the country’s energy crisis and open up the market by reducing red tape for small businesses. However, others have shrugged off or outright dismissed the repeated promises of reform and anti-corruption speak.

A common thread among the responses is that the speech hit a lot of high notes and said the right things, but is tempered by the reality that many of the promises made have been made before – with little in the way of delivery.

The president’s speech contained a few oddities including the following claim: “We all know that government does not create jobs. Business creates jobs.” The president then immediately announced an expanded state jobs programme.

You can read the full SONA 2022 speech here.

These are some of the key reactions to the speech:

Analysts find it a little odd

President Ramaphosa’s speech was largely a rehash of 2021, according to Intellidex market analyst Peter Attard Montalto. That doesn’t mean that it was a bad speech – just that there hasn’t been much in the way of implementation.

“There is clearly positive reform on a range of fronts – as we’ve said before perhaps more than the market realises. Yet the headline dial is not shifting, especially in the labour market. This is then when the speech starts whiplashing to conflicting – negative – reforms,” Attard Montalto said.

While some positive lines were uttered, like the state not being responsible for creating jobs, but being there to enable businesses to do so, this was quickly flipped by the announcement that the state jobs programmes are being expanded, creating an ‘odd’ impression.

Similar trends included talking up fiscal constraints but giving way to hints of more spending and even a basic income grant down the line. These conflicting signals create doubt, the analyst said.

“Overall, the speech was broadly as expected. With so many commitments from the government, they now want a social compact which basically means businesses making commitments on the jobs they will create – but this is simply not credible in our view.

“If the dial continues not to move in the year ahead, then we will all think this speech looked decidedly odd. Maybe that’s how to view things here – the president had little option but to repeat large chunks of last year’s speech and delivery will either happen or not.

“You either believe the dial is going to move on all this or not – business sentiment won’t shift given scepticism and is watching only delivery – which is starting slowly in some areas but replaced always by new issues. There is clearly a path to higher potential growth here, but we cannot adjust forecasts (based on this SONA),” he said.

Businesses expected more

While a large portion of Ramaphosa’s speech was pro-business – with promises to cut red tape and make it much easier to operate a business in the country – leaders from the sector were hoping for more.

Business Leadership South Africa (BLSA) CEO Busi Mavuso called the speech a missed opportunity for the president to show that he is moving with the urgency and vigour needed to reform the ailing business sector.

She said that businesses had hoped for a ‘big bang’ announcement to address blockages in the rollout of infrastructure or to speed up already agreed-upon policy changes.

“The last such (big bang) moment was when the president intervened to ensure the cap for energy self-generation without a licence was raised to 100MW – not the 10MW limit that energy minister Gwede Mantashe wanted to impose.

“That was a breakthrough moment in liberalising the sector which generated much optimism that the government was serious about getting the economy on a strong growth path. Unfortunately, much of the momentum and goodwill generated by that move has dissipated as other areas of the energy reform process are being held up for no specific reason,” she said.

The focus on small businesses was welcomed, however. Particularly the redesigned loan scheme for small businesses and the setting up of a ‘red-tape-cutting task team’. The other promises, such as making the public service more reliable and building more trust between the government and business was also a positive move, Mavuso said.

“In other areas, there were some positive elements but also some missed opportunities,” she said.

Outa is tired of promises

Civil action group, Outa, said the president’s speech hit many of the right notes, but continues to lack credibility due to the government’s failure to make good on its promises. Especially when it comes to dealing with corruption. “We are tired of promises of future action,” the group said.

“We are still waiting for accountability against ministers who failed South Africa during the July 2021 riots, and those linked to state capture. Let this not be the era of blaming all state failures on the state capture gang of the Zuma administration and an ongoing failure to act decisively.”

The group said that the speech contained many excellent statements and ideas, but these will take significant resources to implement.

“We need to see these reflected in the Budget later this month. Ample resources are necessary for law enforcement, specialised anti-corruption units, courts and prosecutors if these promises will come to fruition,” it said.

What politicians said

South Africa’s two main opposition parties were quick to issue statements following the address.

Democratic Alliance leader John Steenhuisen gave credit where it was due, saying that Ramaphosa said “some of the right things”, with the bulk of his speech echoing many DA policies and viewpoints.

However, he noted that the president had made the right noises in the past, and then simply abandoned the stance in practice.

“The proof of the pudding is in the eating, and so we caution all South Africans to hold the applause until these announcements become actions, if they ever do,” he said.

The Economic Freedom Fighters and its leader Julius Malema took a more insulting path, questioning why Ramaphosa was bragging about his “cheap suit” – in response to the president proudly boasting about his suit, which was locally made – calling his promises empty and his posturing pointless.

While different in tone, both the EFF and DA’s responses to the SONA carry the same message: that Ramaphosa has made many of these promises before, and has failed to deliver on them.

[1/2]: EFF Statement On State Of The Nation Address pic.twitter.com/2OCDY6amEf

— Economic Freedom Fighters (@EFFSouthAfrica) February 11, 2022

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