President Cyril Ramaphosa’s first State of the Nation address (Sona) as the president of government of national unity (GNU) will be delivered at a time when the economy continues to suffer from years of weak growth, a high unemployment rate and deterioration of standard of living.
“The 2025 Sona will be so unprecedented on so many fronts,” independent economist Mandla Maleka told Sunday World during an interview.
“It’s the first under the loose leadership of the GNU, the first immediately after the ANC suffered a humiliating loss of votes by a decline of about 17 percentage points, to nearly 40%. It’s the first after Donald Trump was elected for his second term at the White House and last, but not least, the first since the EFF suffered an unprecedented brain drain through the loss of central command members [Mbuyiseni] Ndlozi, [Dali] Mpofu, [Floyd] Shivambu, [Busisiwe] Mkhwebane, etc, and the first after the signing into law the Expropriation Act.”
Maleka said there was no doubt the economy was on its knees and needing an inspirational economic fillip to lift it up from its doldrums.
“It’s an unprecedented Sona where medical doctors are marching to be employed – an unheard of action, particularly from key and critical and scarce skills and qualification bases.
“No country has ever experienced protesting unemployed doctors. As for the economy, it’ll need first a clear pathway in the employment of unemployed medical personnel and employment of teachers amidst the cutting of teaching posts.”
Maleka suggested that Ramaphosa needed to relieve the Reserve Bank’s Monetary Policy Committee from being conservative and inspire it to respond to the consumption side of the economy by lowering interest rates.
“By so doing that’ll boost disposable income and consequently consumer spending, which accounts for well over 65% of consumption GDP.
“The government needs to spearhead lower price of electricity than to leave it at the hands of regulators who are, by the way, insensitive to affordability. This will be a test of the GNU partners, who are largely market-friendly, thus encouraging the tariffs Eskom is asking for regardless of affordability.”
Maleka added that Ramaphosa needed to explain how the country would align the
educational system with artificial intelligence.
“AI, the universal disruptor, is bound to exert unprecedented disruption to our economy, and the sooner we align our educational system the better. We need to respond to AI with matching ingenuity to secure and improve on current skills base. We currently have skills the economy doesn’t need.
“South Africans speak good and excellent English on empty stomachs. Meaning unemployment is high with individuals with a non-fitting education.
“Even our matric passes, much as they near 90%, indications are that core science and maths subjects are increasingly decreasing as matric choice subjects. In a few years time, many of our graduates will be unemployed because of the rigidity of our education.”
Maleka also advised that Ramaphosa should use his speech to rein in GNU main partners, especially the DA, to accept the National Health Insurance, land redistribution, Bela and other important electives of GNU.
“The president must remind them that they are part of government, not opposition as in the past.”
Another economist, Duma Gqubule, was less optimistic. “Whatever Ramaphosa is going to say on Thursday is going to be cancelled out by the budget speech three weeks
later. There has been a trend over the past few years where he announces this during
Sona, and the budget speech cancels it out.
“By the end of this year, GDP per capita will be lower than it was in 2007. This means that the average living standard will be lower than in 2007.
“Unemployment will increase by 500 000 people every year during this administration. What matters at the end of the day is the GDP per capita, economic growth and jobs.
Anything else is irrelevant,” said Gqubule.
