In South African President Cyril Ramaphosa’s recent state-of-the-nation speech, he navigated the delicate balance between extending welfare grants and avoiding populist promises to maintain investor confidence ahead of crucial elections. Amid skepticism, Ramaphosa highlighted progress in diversifying the economy, improving healthcare, and education access. Critics argue the nation has regressed, but Ramaphosa defends his achievements, emphasising strides in social welfare, economic opportunities, crime reduction, increased investment, energy solutions, and logistics improvement. As the nation faces challenges, Ramaphosa remains cautiously optimistic about continued improvement.
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By Mike Cohen
South African President Cyril Ramaphosa’s state-of-the-nation speech was met with predictable skepticism as he laid out the country’s progress since White rule ended 30 years ago. But the most important thing was probably what he left unsaid.
He committed to extending welfare grants but made no concrete ballot-box spending pledges to alarm investors ahead of elections that must take place by August.
“There were no populist promises,” said Busisiwe Mavuso, chief executive officer of lobby group Business Leadership South Africa. “That is an implicit endorsement of National Treasury’s fiscal discipline, which is key to business confidence.”
While opinion polls show the ruling African National Congress risks losing its majority for the first time since taking power in 1994, Ramaphosa said the country had made massive strides in diversifying the economy and boosting access to health care and education.
‘Transformed the Lives’
“We have transformed the lives of millions of South Africans, providing the necessities of life and creating opportunities that never existed before,” he told lawmakers in Cape Town on Thursday evening.
Critics took a polar opposite view, saying the biggest achievements predate his rule and citizens still grapple with substandard schools and hospitals, a 32% unemployment rate, rolling blackouts, logistics snarl-ups and rampant graft.
“South Africa has regressed, across every single metric, into a state of decay and decline that has only exacerbated inequality, placed millions more in the unemployment queue and taken our country backward,” said John Steenhuisen, leader of the main opposition Democratic Alliance.
In his defense, Ramaphosa took office in the wake of Jacob Zuma’s disastrous nine-year rule, during which state coffers were looted and key institutions were hollowed out — a process known as state capture that has proved a mammoth task to reverse.
The onset of the coronavirus pandemic in 2020 also dealt a setback to efforts to revive the economy, as have natural disasters and the fallout of Russia’s war in Ukraine.
“On the critical things around energy, logistics and crime and corruption, and I think progress has been made,” said Old Mutual Ltd. Chief Executive Officer Iain Williamson. “I believe we’ve turned the corner — cautiously optimistic that we will continue to improve further. But I do believe we need to see improvement come a lot faster.”
These are among the government’s key accomplishments highlighted by Ramaphosa:
- Average life expectancy rose to 65 last year, up from 54 in 2003.
- Millions of free homes have been given to those who couldn’t afford them, with 90% of families living in formal dwellings.
- Almost 90% of the population have access to clean water, up from 60% when apartheid ended.
- Schooling is free for those who can’t afford to pay and 9 million pupils are given a daily meal.
- More than 26 million of the nation’s 62 million people currently receive monthly welfare grants.
- Millions of Black South Africans have benefitted from programs to address racial disparities, becoming business owners and managers, and acquiring land and other assets.
- The economy is triple the size it was 30 years ago, and the number of people in employment has more than doubled to 16.7 million — although the jobless rate remains near a record high.
- The leadership of the law-enforcement and tax agencies has been strengthened.
- More than 200 people implicated in state capture are being prosecuted.
- The authorities have seized assets worth 14 billion rand ($737 million) in state capture-related cases, and about 8.6 billion rand in corrupt proceeds have been reclaimed.
- The police force recruited 20,000 additional officers over the past two years and will hire another 10,000 in 2024.
- Investment pledges totaling 1.5 trillion rand have been made to South Africa and more than a third of that has already arrived.
- Infrastructure investment is accelerating, with 14 new bulk water projects completed or under construction.
- The national roads agency has awarded contracts for more than 1,200 projects worth 120 billion rand over the past five years.
- The National Energy Crisis Committee is instituting plans to end blackouts, with new generation capacity having been added.
- Eskom Holdings SOC Ltd., the state utility, is investing more in maintenance and transmission infrastructure and is being restructured to make electricity market more competitive alongside steps to boost private investment in power.
- More than 2,500 megawatts of solar and wind power capacity has been connected to the grid and three times that amount is being procured or under construction.
- South Africa has secured pledges totaling 240 billion rand to help it transition to cleaner forms of energy
- Plans are in place to improve the performance of state logistics company Transnet SOC Ltd. and tackle port and rail bottlenecks.
- The number of ships waiting to berth at the eastern port of Durban fell from more than 60 in mid-November to just 12 at the end of January.
- Transnet has appointed an international operator to help expand and run the Durban port’s biggest terminal.
- Private operators are being allowed to access and operate parts of the freight rail system.