Sameera Casmod | sameerac@radioislam.co.za
7 February 2025 | 11:47 CAT
4-minute read

President Cyril Ramaphosa last night delivered the first State of the Nation Address (SONA) under the Government of National Unity (GNU). The SONA, which provides the strategic framework and main plans for the upcoming year, is a precursor to the National Budget Speech, which is set to take place on February 19, 2025.

Rashaad Amra, a research associate at the Auwal Socioeconomic Research Institute (ASRI), noted that while President Ramaphosa’s SONA speech painted a hopeful vision for the country’s economic future, the real test lies ahead in the upcoming budget speech.

“The proof of the pudding is in the eating; or ‘show me the money’, and he may make certain statements of strategic intent and what he plans to do over the next 12 months, but really it takes expression in the actual budget,” Amra said during the ASRI Report on Radio Islam International this morning.

The new coalition government formed after last year’s election has shown evidence of fissures, with the Democratic Alliance (DA) threatening to exit the GNU. However, analysts have labelled this as political bluster to increase leverage in governmental decision-making.

“[Ramaphosa’s] also trying to fight the tail risk or back flank of MK sleepers within his party. So he’s had to throw certain compromises and make certain gestures around expropriation to assuage some of the concerns of the sleepers within his party,” Amra explained.

The President has been lauded for reaffirming solidarity with the Palestinian people and action against oppression.

“South Africa continues to stand in solidarity with the people of Palestine, who, having endured decades of illegal occupation, are now experiencing indescribable suffering. South Africa has acted in accordance with its obligations under the Genocide Convention by instituting proceedings against Israel at the International Court of Justice,” President Cyril Ramaphosa said during his speech last night.

“As a citizen I was proud of [the President’s points] regarding our standing in international global order. South Africa is now going to be chairing the G20 this year. And so there’s some opportunity for us to try and shape the global order in a modest way with the chairpersonship, especially given the destruction to the global order that’s been met out by the U.S., certainly in the context of Gaza – and even prior to that: the double standards that the global governance and global economic order has manifested,” Amra expressed.

President Ramaphosa’s second term has been marked by significant economic challenges, largely due to the impact of Covid-19 and its global repercussions. Fiscal consolidation efforts have further stifled economic growth in the country. As a result, any economic commitments the President makes will likely require trade-offs or sacrifices in other areas.

The 1% economic growth the country has seen in the last fiscal year is considered de minimis. The 3% growth margin proposed during the SONA is necessary to create jobs and remove South Africa from its fiscal straitjacket, but analysts warn it might be too ambitious.

Infrastructure investment remains a central theme in the government’s economic strategy. However, many of these plans are not new. The President once again emphasised public-private partnerships (PPPs) to drive infrastructure development.

“The idea is that if we don’t have enough of our own resources, we can get private participation in rail, imports, in logistics, to increase investment,” Amra explained.

The President also reiterated his commitment to streamlining bureaucratic red tape through Operation Vulindlela, a policy aimed at removing barriers to business growth. Analysts express optimism in the reduction of red tape to promote economic growth.

Another key concern in this year’s SONA was energy security. After years of crippling load shedding, the government has made significant strides in stabilising the energy supply. The Energy Action Plan has delivered over 300 days without load shedding, a feat that was largely unexpected given the country’s long-standing struggles with Eskom.

Despite this progress, Amra warned that the energy sector still faces major financial hurdles, explaining that the challenge lies more in Eskom’s financial sustainability than in the shortage of electrcitiy. “Eskom is going to continue requiring public resources to stay afloat,” he said.

While independent power producers (IPPs) are entering the market, their contribution to the national grid remains minimal. South Africa remains dependent on Eskom and Amra warns that the real concern is that as Eskom continues to rely on bailouts, that money has to come from somewhere—education, healthcare, and other critical public services.

Although the government insists that Eskom’s financial burden will ease by 2027, Amra remains sceptical. “It’s probably going to go beyond the medium term.

Municipal mismanagement has long been a thorn in South Africa’s side, and this year’s State of the Nation Address (SONA) once again acknowledged the crisis. While the national government has historically been reluctant to intervene directly, the continued failure of local governance structures may leave it with little choice.

The President’s address touched on the issue, promising reforms to improve municipal efficiency. However, as Amra pointed out, the government is trying to avoid direct intervention, preferring to implement oversight mechanisms rather than taking control of failing municipalities.

Listen to the ASRI Report on Sabaahul Muslim with Moulana Junaid Kharsany.