Sona 2025: Tell us how you will help struggling consumers, Mr President

After many political parties and organisations have outlined what they want the president to include in his 2025 State of the Nation Address (Sona) on Thursday night, South Africans will be watching for how government will help struggling consumers.

Neil Roets, CEO of Debt Rescue says the scenario is grim for the man on the street and has been since the Covid-19 pandemic decimated the economy five years ago. “With the dawning of each new year, things get worse for hardworking citizens who pay their taxes and fund the coffers of government.

“The average household income cannot keep up with the escalating cost of living and that is an understatement. Unemployment is at an all-time high, and the youth employment crisis is a ticking time bomb.

“By far the most distressing issue is hunger and malnutrition, especially among our children, yet escalating food costs have become the ‘new normal’, placing three decent meals a day beyond the reach of two-thirds of the nation’s citizens,” he says.

Roets says while he understands the impact of numerous factors on the current situation in the country, we can no longer afford to look back and point to state capture, the pandemic, global influences, natural disasters and a myriad other reasons for the sorry current state of the country, not least because it directly affects 64 million people.

“We need a concrete turnaround plan, Mr President. Do you have one?”

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Job creation must be priority in Sona 2025

He says job creation is a priority, or it should be. “With 32% of the population currently unemployed and youth unemployment at an astronomical 60% — among the highest in the world — we stand at the tipping point of becoming a state-funded nation and everything that comes with that.”

Roets points out that in his 2024 Sona, Ramaphosa emphasised that having a job not only provides an income but is also essential for someone’s dignity, sense of purpose and inclusion in society.

“I fully agree. Why, then, is there such a strong focus on expanding state grants and introducing a universal basic income? While grants provide crucial relief for millions, would it not be more sustainable to direct those billions toward large-scale job creation initiatives, empowering people to build a future rather than just survive?”

He says a surefire way to ease the economic and financial burden that is all but burying the nation’s citizens right now is to focus on economic growth. “Yet South Africa stands out as having one of the world’s most restrictive business environments — according to the International Monetary Fund, no less.

“Recently, the IMF pointed out that onerous and costly government regulations and high regulatory obstacles are hindering and curtailing business operations. The IMF urged government to package reforms to cut through the red tape, which will boost growth and employment.”

ALSO READ: IMF welcomes SA’s reform efforts but says more is needed

Is IMF’s recommendations part of Ramaphosa’s plan for Sona 2025?

The IMF’s economists calculate that South Africa could add 1.8% to its annual economic growth rate over the medium term and 1.5% to annual job growth, with a package of reforms, effectively closing the gap with its emerging market peers. Roets says he fervently hopes this is part of Ramaphosa’s plan, as people have reached the end of their rope.

“South Africa’s broader regulatory and governance quagmire has plunged the economy into a growth trap for more than a decade, seriously impeding electricity and logistics reforms and therefore, it is encouraging that the monetary policy committee (MPC) of the South African Reserve Bank (Sarb) focussed on accelerating structural reforms in the country during their last meeting.”

The MPC pointed out that accelerated structural reforms could see economic growth pick up to 3% in 2027, with inflation and interest rates coming down.

“We need economic and social stability to grow the economy, and while I consider the elements at play, more needs to be done to take the pressure off the country’s taxpayers. I appreciate Sarb governor Lesetja Kganyago’s most recent 25 basis points cut in the interest rate although it is simply a case of too little too late.

“The reality is that rising fuel and electricity costs will simply cancel out any potential saving for consumers, leaving them in the same boat as before, which, it needs to be said, is on the verge of capsizing.”

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Sona 2025 should include escalating cost of living

Roets says, at the risk of sounding like a broken record, the escalating cost of living is decimating the lives of South Africans from all walks of life and across income sectors. “People are contending with a constant onslaught of escalating fuel prices, skyrocketing food prices, unnecessarily high interest rates and constant electricity tariff hikes. They are at the edge of the cliff. How much longer are they expected to hang on?

“Make no mistake, Mr President, the country is proud of your achievements, and we wish you well. Your G20 Presidency and the G20 Summit being hosted on African soil for the first time is a historic milestone. It presents an unprecedented opportunity for South Africa to shine on the international stage.

“We also understand that this year’s Sona will be governed by the unprecedented dynamics of the government of national unity (GNU). We are acutely aware of the collective commitment needed to make this collaborative governance work. We trust that you will hold the line and take decisions that are in the best interest of us all when signing new Bills into law that determine the trajectory of the economy.” 

Roets warns that South African consumers need urgent financial relief. “They can no longer ‘hold on’ until better days come. Hope is fading fast, along with the state of the nation’s health, finances, and mental health. They are looking to you to restore it, Mr. President. We are counting on you to step up and deliver this year.”