12 February 2013

South Africa: Business Looks to Zuma's Address

Photo: GCIS
President Jacob Zuma puts the final touches on his 2012 State of the Nation Address (file photo).

South African business will be looking to President Jacob Zuma's 2013 State of the Nation Address (Sona) to spell out out how the private sector can play a greater role in the country's infrastructure drive and National Development Plan, says Business Unity SA (Busa).

Zuma will deliver his address to a joint sitting of in Parliament in Cape Town at 7pm on Thursday. The speech will be broadcast live on SABC and e.tv, as well as on the radio.

"There are relatively low levels of investor and business confidence, but the Sona and the Budget speech may improve business mood," Busa policy adviser Raymond Parsons told reporters in Johannesburg on Monday.

Zuma's address comes after the Cabinet's recent adoption of the National Development Plan, which makes far-reaching proposals to direct the country's development.

"We would like to hear more details as to how the private sector will be part of the National Development Plan," Parsons said.

"There will be trade-offs and there will be tough decisions, but we must take the long view. This is the opportunity to take the country with you and share the vision.

"We want to see the roll-out of the infrastructure programme more aggressively to improve state capacity and activate the private sector, because infrastructure development will make a great impact on our growth."

Parsons said the overarching concern for business was to ensure that South Africa narrowed the gap between policy formulation and implementation.

He said business felt that Zuma's speech on Thursday, and the 2013 National Budget, to be tabled by Finance Minister Pravin Gordhan later this month, should help prevent another ratings downgrade.

"Negative investor perception could result in higher borrowing costs and decline in short-term capital inflows needed to finance the trade deficit," he said.

Despite a bumpy 2012, Busa believes the economy will stabilise and start creating new jobs in 2013, projecting gross domestic product (GDP) growth of about 2.6 percent for the year, but with downside risks.

South Africa' economic performance was "disappointing" last year, Busa said, for both internal and external reasons, including the negative impact of the slowdown in the eurozone on SA exports.

Recruitment company Adcorp's employment index, released on Monday, fell by an annualised 3.2%, reflecting that the economy shed 51 495 jobs in January.

Busa said it was crucial that there was buy-in from all partners for the successful implementation of the National Development Plan, with the aim of maximising development and job creation.

Busa CEO Nomaxabiso Majokweni said the organisation hoped to see policies focused on realising the NDP.

"Implementation of the NDP should therefore start to reflect in the budget allocations. The proposals in the NDP have a major impact on state expenditure, and yet the NDP itself lacks the overall financial framework in which the planned expenditure will take place," Majokweni said.

She added that the NDP would only work if the private sector could create jobs quickly enough.

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