What South Africa needs to hear from Ramaphosa today

President Cyril Ramaphosa should allay the fears of investors, especially when it comes to state-owned enterprises and the Reserve Bank when he delivers his State of the Nation address (Sona) today, analysts say.

The Institute of Race Relations (IRR) yesterday said its main concern was the supposed threat to pension funds posed by the ANC’s earlier announcement of a plan to introduce a list of prescribed assets into which pension funds must be invested.

This was seen by some critics, such as IRR project manager Terrence Colligan, as a gateway to using pension funds to plug holes in the porous finances of several key state-owned entities, such as Eskom.

The lobby group had been running a campaign to put public pressure on Finance Minister Tito Mboweni to desist from such a policy.

This, coupled with the continued debate on the nationalisation of SA Reserve Bank (Sarb), had rendered the economy “uninvestable” for local and international investors, said Colligan.

The founder of asset manager 10X Investments, Steven Nathan, said Ramaphosa’s address today needed to be a crisis plan.

“He should be in crisis mode. The country is in crisis. Things are getting worse, fast. Our finances are getting worse … look at the tax receipts. The liabilities of Eskom are hundreds of billions of rands. We need a crisis response.”

State utility Eskom yesterday announced the appointment of Bheki Nxumalo as new CEO for its embattled generation business, effective from next month. System failures at major power stations led to massive bouts of rolling blackouts earlier this year, shedding a total 769GWh in the first quarter.

In his February Sona, Ramaphosa announced the planned splitting of the utility into three separate entities to alleviate its triple threat of high debt, massive costs and ailing revenue.

Nathan said he expected more decisive, concrete action and less rhetoric – starting with SOEs.

“Dealing decisively with SOEs, such as South African Airways, would be a good start. It should be easier to address the problems at SOEs as they have commercial motives, unlike governmental departments. They should be run along commercially measurable benchmarks,” he said.

“If we could get some commercial benchmarks for SAA, for example, and get some tangible actions towards implementing those, it would be a positive step … It would signal government’s intent to actually correct things, to address issues, rather than more political rhetoric that doesn’t translate into actions and results and a better country for all South Africans.”

Colligan said the policy uncertainty caused by the debate on land expropriation also contributed greatly to the anxieties of investors, as well as ordinary citizens.

INFO

• Nine television, radio and digital broadcasters, as well as Parliament TV, will be broadcasting live from parliament.
• 1,200 guests are expected to attend. Confirmed guests include Chief Justice Mogoeng Mogoeng, former president Thabo Mbeki, former president Kgalema Motlanthe, former Speaker Frene Ginwala and political activist Andrew Mlangeni.
• The ceremony has been scaled down because of financial considerations and the customary junior and civil guards of honour and nine eminent persons (one from each province) will not feature today.
• Parliament had planned not to have a praise singer to accompany the president into the National Assembly chamber before he delivers the State of the Nation address. But “following the concerns from several groupings about this” the matter was being reconsidered.

– simnikiweh@citizen.co.za

– Additional reporting by ANA

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