Johannesburg – “We are stronger today than what we were a year ago,” was the core message of President Cyril Ramaphosa’s State-of-the-Nation Address (SONA), which Business Leadership South Africa (BLSA) says it agrees with.
Commenting on the SONA, BLSA said there was much to celebrate, but emphasised the importance of accelerating the implementation of reforms to ensure further success stories.
BLSA added: “ ThePresident did address one particular reform concern related to Eskom’s unbundling when he made it clear that a fully independent TSO will be established and it will have the ownership and full control of Transmission assets.
“This clearly asserts government’s position on the Eskom unbundling and the role and independence of the Transmission System Operator, which would be effectively independent from Eskom Holdings.
“The President’s statement confirms the agreed process, as set out in the relevant legislation, and he said a task team under Necom would address the issue, to report back in three months.”
BLSA CEO Busisiwe Mavuso stated: “This issue has caused major concern, with international investors and local business leaders starting to question government’s commitment to the reform programme.
“Certainty is important, and we are encouraged by President Ramaphosa’s comments.”
SONA generally has two aspects: commentary on the current state of affairs and presenting the government’s priority programme for the year.
BLSA said on the former, the President could point to some important victories, including the country’s improved credit rating and removal from the FATF grey list.
He highlighted other achievements, including inflation at its lowest level in more than 20 years, a stronger rand, lower borrowing costs, and the JSE’s exceptional performance.
Other achievements include the absence of load-shedding, ports and rail line improvements, the South African Revenue Service (SARS) once again being considered a world authority, and the successful hosting of the G20.
Digitisation is also advancing well at Home Affairs – following SARS’ achievements in this space.
BLSA said it agrees that these are notable achievements that should be celebrated.
“We are sitting in a significantly improved environment in various aspects than a year ago,” said Mavuso.
“It’s important that we applaud this and acknowledge that our reforms are functioning and starting to make a difference, as indicated by our BLSA Tracker.
“We also applaud the digitisation drive in government.
“We know, as demonstrated by SARS, that the competitiveness of state entities, just like in the private sector, lies in their ability to have cutting-edge IT infrastructure.”
While celebrating these achievements, BLSA said it believes the overall reform programme could do with a government-wide injection of renewed energy and focus on accelerating its implementation.
Without the implementation of the range of municipal reforms that Operation Vulindlela is working on, residents of municipalities across the country will continue to suffer the indignity of inadequate water and electricity supply.
Similarly, without improving the efficiency of our energy, rail, and port systems, for example, the economy will continue to struggle in the low-growth trap that President Ramaphosa mentioned.
In that context, he mentioned an implementation plan by the Cabinet to drive growth and inclusion.
BLSA said it would be keen to see details of the plan and contribute to its input.
The President focused a large part of his speech on the dire water situation, where many residents go without water for weeks and months, while some areas have been dry for years.
He highlighted how important it is to restore water and sanitation services and outlined the important reforms already planned or being implemented.
These are positive but are in their early stages, and the problem of dysfunctional local government is widespread.
BLSA said it was particularly encouraged by his emphasis on accountability in local government, saying criminal charges had been laid against 56 municipalities and that charges would also be laid against individual municipal managers if necessary.
Importantly, President Ramaphosa promised that the national government would intervene if a municipality was unable to solve its problems.
“President Ramaphosa put the right emphasis on the importance of municipal reform as this is essential to improving delivery of water, electricity, and other services,” said Mavuso.
“We hope that the sense of urgency he conveyed in his speech carries down to the relevant national and provincial officials, so that they ensure the municipalities respond positively to the initiatives.”
BLSA also welcomes the President’s determination to “step up the fight against crime and criminal syndicates”, though deploying an under-resourced SA National Defence Force (SANDF) to support police with gang violence and illegal mining must be treated cautiously, with their responsibilities clearly articulated.
Illegal cigarettes and other products swamping the local market are a particular problem that BLSA has been at the forefront of fighting, and we welcome the National Illicit Economy Disruption Programme being established with data analytics and AI resources to help detect counterfeit products.
President Ramaphosa said protection of jobs was paramount for the steel and automotive industries in particular, and while mentioning dumping by Asian countries, he did not speak about deindustrialisation and destruction of manufacturing capacity in the country caused by cheaper Asian products.
Mavuso stated: “We need an evaluation of every trade agreement and investment opportunity against clear criteria, and those criteria should be: Does this create quality employment in South Africa?
“Does it build our industrial capacity? Does it expand our export capabilities?”
While the protection of jobs was a welcome focus, equally important was the President’s announcement that the skills pipeline would be substantially refigured to create the skills needed to power the economy and grow jobs.
The streamlining and reconfiguration of the Sector Education and Training Authorities (SETAs) and the introduction of an apprentice system to build practical work skills are most welcome and will hopefully address one of business’s longest-standing constraints.
Overall, BLSA said it agrees with the President that the country has much to celebrate.
He presented a fairly accurate reflection of the current state of the nation, focusing on problematic areas, along with highlighting the achievements.
BLSA said it would have liked to have heard more assurances that the Cabinet and entire government would focus on tackling the obstacles to reforms and have an overriding mandate to accelerate reforms where they can.
Because as ever, implementation remains key, and BLSA said it hopes that next year the President is able to list an even longer, more impressive list of achievements for 2026.
