Business

Sona is D-Day for Eskom, economy

2019-02-06 23:15

President Cyril Ramaphosa is expected to announce 18 key economic areas that will be prioritised for investment to grow the economy by between 5% and 7% a year, in his state of the nation address on Thursday.

It emerged at the Business Unity SA (Busa) Business Economic Indaba in Midrand last week that the government and Busa had finalised the list of economic areas of concern.

A source, who was present in a meeting when Ramaphosa met a number of ministers and Busa executives, said an announcement of whether Eskom would be unbundled would be announced during the Sona.

Public Enterprises Minister Pravin Gordhan had, in an earlier panel discussion at the Busa event, hinted that a debate about unbundling Eskom should be held sooner rather than later.

Approached for further comment, Gordhan declined to shed more light.

At the Busa event it appeared as though the government and business had finally found each other in the maze of an underperforming economy.

Ramaphosa promised to “deal” with the inhibitors of economic progress.

This is the sentiment Ramaphosa and Busa president Sipho Pityana mentioned in their speeches at the indaba earlier last week.

Pityana said in his opening address that the fact that the private sector accounted for more than 70% of economic activity, investment and employment in the South African economy showed that it was able to set the tone of the narrative about how it could contribute to driving the economy out of the present quagmire.

“For me it is not enough to see growth in the national economy – if your local economy is shrinking. It is not ambitious enough to have record jobs growth, unless those jobs are secure and delivering real growth in wages.

And we are not fulfilling South Africa’s potential if, despite having world-class and renowned learning institutions, we cannot turn their ideas into the products and services on which the industries of the future will be built,” Pityana said.

Read: Treasury: Clarity about Eskom in February

He said the country needed a new framework for economic growth and the level of inequality in the country had now become an economic risk.

“If the notion of partnership is only about the creation of a conducive environment for business to thrive, important though that may be, we might be perceived as opportunistic, self-serving and indifferent to the real challenges of the day.

“In short, when government and business sit down to talk, our conversation should be more than about business contracts – more importantly, it should be about social contracts.

“Business must define itself as a reliable partner with government in delivering economic justice,” he said.

Ramaphosa gave a synopsis of the malpractices and undesirable “things” that happened while he was deputy president.

“We are now at a point where we are beginning to talk more openly; more directly about matters that we may not have been able to talk about a few years ago.

“And, sometimes, as they say in classics, you must not waste a crisis. The crisis that we have had with the loss of confidence and trust in the past few years has enabled us to create this new platform.

“We now have a new wonderful platform, which is becoming stronger.”

Ramaphosa said it would become eeven stronger with more talk and collaboration.

He said the initiatives that government had been embarking on had been about righting the wrongs so that the economy could grow.

“We put in place a mechanism that is ferreting out all the horrible things that have been happening and after all that there has to be action,” Ramaphosa said.

It was expected that there would be a fightback from those affected by the clean-up, he said.

The country was now open for collaboration and business and the goal was to grow the economy, Ramaphosa said.


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February 17 2019