SONA 2025: What businesses want from Ramaphosa’s big speech

President Cyril Ramaphosa will deliver the State of the Nation (SONA) address later today, 6 February, with businesses looking for the President to prioritise economic growth initiatives.

The latest SONA will be the first of the Government of National Unity (GNU), which was formed after the ANC lost its majority and started working with several other parties, including the DA and IFP.

Although tensions between GNU members have been high recently, confidence has been growing that the parties are committed to finding workable solutions to their differences.

Business Leadership South Africa CEO Busiswe Mavuso said that the President can use the SONA to consolidate confidence by commitment to working with partners.

Mavuso added that the President should focus on efforts to deliver 3% economic growth by the end of 2025.

“That is the kind of growth that will start making a meaningful impact on unemployment, spur investment and generate the tax revenue required to support government’s social programmes,” said Mavuso.

The 3% growth estimate from the Bureau for Economic Research (BER) is well above what most economists expect for the nation, and is dependent on South Africa achieving reforms in the following:

• Electricity shortages;
• Logistics challenges;
• Water constraints; and
• Governance failures.

Mavuso said that business and government have formed a productive partnership, to achieve growth, and the SONA speech could be used to reinforce the action plans.

She noted that the last weekend was a sobering reminder that South Africa cannot slow down with the return of load shedding after over 300 days without it.

“While we have made dramatic progress in improving electricity security, the reform process still has some way to go to ensure that load shedding is well and truly behind us,” said Mavuso.

“We must continue with Eskom’s unbundling, drive major new grid investment and commission new generation.”

With some elements behind target in the Energy Action Plan that government and business have been implementing, especially new transmission, Mavuso said the President could focus on the reforms to get private sector grid investments underway.

Apart from ensuring the Energy Action Plan is fully implemented, Mavuso said that more needs to be done regarding the freight logistics roadmap.

“Transnet has been making encouraging, though tentative, progress towards setting up the scope for increased partnerships with the private sector.”

“These need to become more ambitious.”

“If we are to unleash the scale of investment needed to upgrade and then efficiently operate our rail and port infrastructure, private investment needs to be brought in on a much bigger scale through concessions.”

She said that open access to rail infrastructure must be fast-tracked, which could bring in over R250 billion in investment in the rail network by 2030.

Mavuso also noted that the President should focus on restoring the criminal justice system, plans to escape the FATF grey list this year, and impairments to local government service delivery.

The calamitous financial state of many municipalities in South Africa is a severe risk to the economy, with many owing billions to Eskom.

There is also a systemic risk that many large municipalities will simply collapse and fail to provide basic services to their residents and businesses.

The BLSA CEO added that the president can emphasise the seriousness with which the government is taking the problem.

Future events

Momentum is also building towards South Africa hosting the G20 and associated business events at the B20, which can help demonstrate to the world that South Africa is back in business.

The President can thus use the SONA to reinforce the government’s commitment to leading the G20 agenda and supporting global policy shifts that enable growth in emerging markets.

National Treasury will also be busy preparing for the 2025 budget speech, which is less than two weeks away.

Mavuso said that National Treasury should focus on reforms to improve the business environment, from exchange control to tax certainty.

“The SONA and then the budget speech two weeks later are critical to ensuring we follow through, to ultimately deliver on our growth ambitions.”