Economy News South Africa

#Sona2023: South Africans are staring down the barrel as state of disaster is reinstated

South Africa's President Cyril Ramaphosa has called on a National State of Disaster.
Source: Reuters. President Cyril Ramaphosa.
Source: Reuters. President Cyril Ramaphosa.

The declaration was gazetted on Thursday (9 February 2023) and begins with immediate effect. It will provide practical measures needed to support businesses, food production storage facilities, retail supply chains, and to aid in the roll out of generators and solar panels in a means to provide uninterrupted power supply.

It will also exempt critical infrastructures such as hospitals and water treatment plants from load shedding.

Ramaphosa announced too that a Minister of Electricity in the Presidency will be appointed, as will an auditor general "to guard against any abuses of funds to deal with this disaster."

"The Minister of Electricity in the presidency will oversee all aspects of the electricity crisis response and the work of the national energy crisis committee. The Minister will focus full time on the work with the Eskom board and management on ending load shedding and ensuring the energy action plan is implemented without delay," Ramaphosa said.

Challenging authority

The news was delivered off the back of an explosive kickoff of SONA2023, in which president of the Economic Freedom Fighters, Julius Malema challenged Cyril Ramaphosa's right to address the nation. The party has accused President Cyril Ramaphosa of waging war against the country’s parliament.

This comes as the president has lodged an application to review and set aside the findings of the Section 89 independent panel, which found that Ramaphosa has a case to answer on the Phala Phala farm matter.

After a metaphorical longstanding locking of horns between Ramaphosa and Malema, Speaker Nosiviwe Mapisa-Nqakula ordered Malema to leave the joint sitting. After EFF members stormed the stage, Security Services were called into action - a move DA leader, John Steenhuizen later coined as "the intimidation of members of parliament by members".

"This is an absolute disgrace. The ANC-led government is itself a massive disappointment, BUT ... the EFF is quite literally subverting democratic processes themselves. How are voters supposed to regard them as a clear and credible alternative to the ANC?" a spectator, Eusebius McKaiser tweeted.

"Drastic circumstances require drastic measures," Ramaphosa added after declaring a National State of Disaster. He said Government will implement the recommendation of the presidential state-owned enterprise (SOE) council to establish a state-owned holding company as part of a centralised shareholder owner model to ensure effective oversight over SOEs.

He said the number of interventions to address failures at local government include "invoking the powers of national government to intervene where municipalities fail to meet their constitutional responsibilities."

Centralisation of power

ActionSA has denounced Ramaphosa's declaration of a state of disaster.

In a statement, its leader Herman Mashaba described it as a move to "centralise power to his office". "The irony is the [state of disaster] is a crisis entirely of the ANC's making," he said.

"ActionSA reiterates its opposition to a [state of disaster] and the powers it will afford the Executive to abuse state resources, as seen with the PPE and Digital Vibes scandals during Covid-19. We simply cannot afford to go through this again," he said.

Ramaphosa's lazer-like focus on addressing SA's energy crisis steered attention away from paralleling the current State of Disaster to the country's last State of Disaster during which Covid-19 vaccinations and lockdowns were mandated, which in turn steered it away from providing transparency on the particulars of the roll out of the National Health Insurance.

"The energy crisis is an existential threat to the economy and the social fabric of our country," he said.

But it may also be the death knell to his reputation. Because, while Ramaphosa focused intensely on what he will do and achieve in his Sona 2023, it's what he has already done that carries weight:

"The NPA in the investigating directive which I established in 2019 has taken 187 accused persons in 32 state corruption cases. Over R7bn has so far been returned to the state from state capture cases. To date over R12.9bn in funds and assets have been frozen."

To provide context, State Capture is said to have cost SA R500bn, some say R11tn.

How many more individuals involved in State Capture have yet to be brought to book? In his own words at Sona 2023, Ramaphosa said "163 out our 257 local governments and municipalities are ineffective due to poor governance, corrupt administration management and poor service delivery".

So truly, it's what he hasn't done that speaks volumes.

The key take-aways from President Ramaphosa's speech:

  • An Electricity Regulation Amendment Bill will soon be tabled in parliament to allow for a competitive electricity market.
  • When it comes to South Africa's Just Energy Transition Investment Plan, 1.5tn will be invested in our economy over the next five years, and will allow for the growth of new sectors such as electric vehicle (EV) manufacturing.
  • Government in partnership with SA SME Fund is working to establish a R10bn fund to support SMME growth. Government is looking at the possibility of providing R2.5bn for the fund with the balance of R7.5bn to be raised from private sector.
  • During the course of this year, Government will migrate the remaining households to digital television signal and complete the switch-off of analogue transmission. This will release valuable spectrum for the rollout of 5G mobile networks and will reduce the cost of data.
  • South Africa assumes the chairmanship of Brics and its focus will be on collaboration, sustainable development, the just energy transition and industrialisation and implementation of the African Continental Free Trade Agreement.
  • Read Ramaphosa's full speech here.

    About Katja Hamilton

    Katja is the Finance, Property and Healthcare Editor at Bizcommunity.
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