President Cyril Ramaphosa can use his State of the Nation Address (SoNA), set to be delivered on February 6, to reinforce the fundamental commitment by different parties to find workable solutions to their differences, putting the country first and ensuring stability, says business organisation Business Leadership South Africa (BLSA) CEO Busi Mavuso.

The SoNA is an opportunity to consolidate the work needed to deliver 3% economic growth by the end of this year, which 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, she emphasises in her latest weekly newsletter.

“Business and government have formed a productive partnership, in line with our common interest to deliver growth, and the SoNA can reinforce the plans for action to achieve growth.”

The Government of National Unity has been making good progress on reforms on several fronts, she adds.

However, the SoNA should address long-promised reforms to streamline the regulations that govern public-private partnerships. National Treasury can make clear progress in this and other regulatory reform to improve the business environment - from exchange control to tax certainty, Mavuso says.

“While dramatic progress in improving electricity security has been made, the reform process still has some way to go to ensure that loadshedding is behind us. We must continue with Eskom’s unbundling, drive major new grid investment and commission new generation.

“This is all part of the Energy Action Plan (EAP) that government and business have been implementing together and the SoNA is an opportunity to recommit to driving its completion,” she says.

Further, while some elements of the EAP are behind target, including new generation and transmission investment, South Africa can catch up through government’s partnership, if the President recommits to driving the momentum, particularly the reforms needed to get private sector grid investments under way, she highlights.

However, to unleash the scale of investment needed to upgrade and then efficiently operate the country's rail and port infrastructure, private investment needs to be brought in on a much bigger scale through concessions, she says.

There has been progress in stabilising port and rail performance, but South Africa now needs to open the taps for new investment. Open access to rail infrastructure must be fast-tracked as part of delivering on the Network Statement, published in December, that could spark R250-billion to R300-billion in investment in the rail network by 2030.

“We need to swiftly deliver on the freight logistics roadmap. Transnet has been making encouraging, though tentative, progress towards setting up scope for increased partnerships with the private sector,” Mavuso says.

Further, South Africa can exit the Financial Action Task Force grey list this year if it focuses on restoring the criminal justice system by demonstrating that the National Prosecuting Authority can successfully prosecute for corruption, money laundering and terrorist financing, she adds.

“The President can talk about institutional renewal, and how key points across the system, like the Hawks and crime intelligence agencies, can be supported to enable performance improvements,” she suggests.

LOCAL MUNICIPALITIES

Meanwhile, the calamitous financial state of many municipalities is now a serious risk to the economy. This is recognised as a major challenge, and business and government are working on interventions and support, Mavuso emphasises.

“There is a systemic risk that some large municipalities will simply collapse and fail to provide basic services to their residents and businesses. Municipalities are unable to manage their liabilities, including to Eskom, but also to many other service providers.”

The SoNA must focus on local government service delivery and water infrastructure. The President should emphasise the seriousness with which government is tackling the problem, she suggests.

Further, the President can use the SoNA to reinforce government’s commitment to leading the G20 agenda and supporting global policy shifts that enable growth in emerging markets, she notes.

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