Statement

STATE OF THE NATION ADDRESS BY PRESIDENT CYRIL RAMAPHOSA, PARLIAMENT, CAPE TOWN, 13 FEBRUARY 2020

Cyril Ramaphosa

Speaker of the National Assembly, Ms Thandi Modise,

Chairperson of the National Council of Provinces, Mr Amos Masondo,

Deputy President David Mabuza,

Chief Justice Mogoeng Mogoeng and esteemed members of the judiciary,

Former President Thabo Mbeki and Mrs Mbeki,

Former President Kgalema Motlanthe and Mrs Motlanthe,

Former Deputy President FW de Klerk and Mrs De Klerk,

Former Speaker Ms Baleka Mbete and Mr Khomo,

President of the Pan African Parliament, HE Mr Roger Nkodo Dang,   

UN Women SA Representative, Ms Anne Githuku-Shongwe,

Isithwalandwe, Mr Andrew Mlangeni,

Ministers and Deputy Ministers,

Premiers and Speakers of Provincial Legislatures,

President of SALGA and Executive Mayors,

Governor of the South African Reserve Bank, Mr Lesetja Kganyago,

Heads of Chapter 9 Institutions,

Leaders of faith based organisations,

Leaders of academic and research institutions,

Members of the Diplomatic Corps,

Invited Guests,

Honourable Members of the National Assembly,

Honourable Members of the National Council of Provinces,

Fellow South Africans,

It is 30 years since Nelson Rolihlahla Mandela walked out of the gates of Victor Verster Prison, a moment in our history that signalled perhaps more vividly than any other that freedom was at hand.

As he stood on the balcony of Cape Town City Hall to address the masses who had come in their tens of thousands to welcome him, he said:

‘Our march to freedom is irreversible. We must not allow fear to stand in our way.’

Now, 30 years later, as we continue our onward march to improve the lives of our people, as we confront great challenges, as we endure troubled times, we too cannot allow fear to stand in our way.

We must forge ahead, permitting neither adversity nor doubt to divert us.

As we gather to reflect on the state of our nation, we are joined by the family of Basil February, a courageous young freedom fighter who lost his life in Zimbabwe in the Wankie campaign of 1967.

For half a century his resting place, like those of several of his comrades, has, until now, remained unknown.

His contribution, his sacrifice, has never been forgotten.

This evening, we gather here humbled by the memories of those men and women who gave their lives for our freedom, deeply aware of the great responsibility we carry to realise their dreams.

There are times when we have fallen short, there are times when we have made mistakes, but we remain unwavering in our determination to build a society that is free and equal and at peace.

Our history tells us that when we are united in peace and faith, we can conquer all obstacles and turn our country into a place in which we all feel safe and comfortable.

It is in that spirit that we now approach the present moment.

Our country is facing a stark reality.

Our economy has not grown at any meaningful rate for over a decade.

Even as jobs are being created, the rate of unemployment is deepening.

The recovery of our economy has stalled as persistent energy shortages have disrupted businesses and people’s lives.

Several state owned enterprises are in distress, and our public finances are under severe pressure.

It is you, the people of South Africa, who carry this burden, confronted by rising living costs, unable to escape poverty, unable to realise your potential.

Yet, at the same time, there is another part to our reality.

It is the reality of a youthful population that has more access to education than ever before and which is achieving steadily improving outcomes.

It is the reality of 2.4 million children in early childhood development and pre-school.

It is about the 81% of learners who passed matric last year, with an increasing proportion coming from rural and township schools.

For this great achievement, we applaud the Class of 2019.

Our reality is also that of the 720,000 students who received state funding for TVET colleges and universities last year.

It is about the 6.8 million South Africans who know their HIV status, about the 5 million people who have been initiated on antiretroviral treatment and the 4.2 million people whose HIV viral load is, as a consequence, undetectable.

These are not just statistics.

These are lives being improved.

They are signs of progress.

Our reality is also one of unbounded potential.

Of a soil that is rich in minerals and in a diversity of plant and animal life that has few equals in the world.

Of a deep capital base, extensive infrastructure, sound laws and robust institutions.

Of a rich, diverse, young and talented people.

Tonight, we are joined by Zozibini Tunzi, whose ascendance to the Miss Universe title is a reminder of our potential to achieve greatness against the odds.

We also welcome Springbok captain Siya Kolisi, who led a group of determined and united South Africans to become the 2019 World Rugby Champions.

We are joined this evening by another remarkable young person, Miss Sinoyolo Qumba, a Grade 11 learner from Lenasia South, who spent much of yesterday helping me to write this State of the Nation Address.

Her intellect, her social awareness, her passion and her diligence give me great confidence in the future of this country.

In my first two addresses to the nation I spoke at length about the necessity of social compacting, and the great responsibility we shoulder as government to drive collaboration and consensus.

In 1994 we chose the path of negotiation, compromise and peaceful settlement, instead of hatred and revenge.

Our history and contemporary experience has taught us that if we are to achieve what we set out to do, we must focus on what unites instead of divides.

The greatest strength of our constitutional democracy, and the reason it has endured, is because we have been able to forge broad-based coalitions and social compacts, be they with business, labour, special interest groups or wider civil society.

Achieving consensus and building social compacts is a not demonstration of weakness. It is the very essence of who we are.

That is why over the past two years we have been hard at work seeking to forge and build consensus around our economic recovery plan.

In his inaugural address on the 10th of May 1994, President Nelson Mandela said:

“Today we enter into a covenant that we shall build a society in which all South Africans, both black and white, will be able to walk tall, without fear in their hearts, assured of their inalienable right to human dignity.”

This government remains irrevocably committed to upholding that covenant.

It is a covenant that is rooted in the strategic objective of our National Development Plan, which is to eliminate poverty and reduce inequality by 2030.

Let us frankly admit that that the government cannot solve our economic challenges alone.

Even if we were to marshal every single resource at our disposal, and engage on a huge expenditure of public funds, we would not alone be able to guarantee employment to the millions of people who are out of work.

What we have achieved, we have achieved together.

Over the course of the last two years – since I first stood here to deliver a State of the Nation Address – we have worked to forge compacts among South Africans to answer the many challenges before us.

Through the Jobs Summit, we brought labour, business, government and communities together to find solutions to the unemployment crisis, and we continue to meet at the beginning of every month to remove blockages and drive interventions that will save and create jobs.

We have come together, as government and civil society, as communities and faith-based groupings, to confront the violence that is perpetrated by men against women.

We have brought business, labour and government together to craft master plans for those industries that have the greatest potential for growth.

We have come together as different spheres of government, as different state entities, as business associations and community groups under a new district development model that is fundamentally changing our approach to local development.

We have been building social compacts because it is through partnership and cooperation that we progress.

Together, over these last two years, we have worked to stabilise our economy and build a foundation for growth.

We have been deliberate in rebuilding institutions and removing impediments to investment.

We have acted decisively against state capture and fought back against corruption.

We have steadily improved the reach of education, improved the quality of health care and tended to the basic needs of the poor.

Yet, that has not been enough.

It has not been enough to free our economy from the grim inheritance of our past, nor from the mistakes that we ourselves have made.

It has not been enough to spare us from the debilitating effects of load-shedding, nor from an unstable and subdued global economy.

And so we find ourselves today at a decisive moment.

We have a choice.

We can succumb to the many and difficult and protracted problems that confront us, or we can confront them, with resolve and determination and with action.

Because we choose to confront our challenges, our immediate, vital and overarching task is to place our economy on a path of inclusive growth.

Without growth there will be no jobs, and without jobs there will be no meaningful improvement in the lives of our people.

This State of the Nation Address is therefore about inclusive growth.

It is about the critical actions we take this year to build a capable state and place our economy on the path to recovery.

This year, we fix the fundamentals.

We pursue critical areas of growth.

And we ensure excellence in planning and execution in government.

Fellow South Africans,

For over a decade, South Africans have had to contend with the effects of a constrained energy supply.

I have spoken extensively about the critical role that Eskom plays in the economy of our country and in the livelihood of every South African.

The load shedding of the last few months has had a debilitating effect on our country.

It has severely set back our efforts to rebuild the economy and to create jobs.

Every time it occurs, it disrupts people’s lives, causing frustration, inconvenience, hardship.

At its core, load-shedding is the inevitable consequence of Eskom’s inability over many years – due to debt, lack of capacity and state capture – to service its power plants.

The reality that we will need to accept is that in order for Eskom to undertake the fundamental maintenance necessary to improve the reliability of supply, load-shedding will remain a possibility for the immediate future.

Where load-shedding is unavoidable, it must be undertaken in a manner that is predictable and minimises disruption and the cost to firms and households.

Over the next few months, as Eskom works to restore its operational capabilities, we will be implementing measures that will fundamentally change the trajectory of energy generation in our country.

We are taking the following measures to rapidly and significantly increase generation capacity outside of Eskom:

–     A Section 34 Ministerial Determination will be issued shortly to give effect to the Integrated Resource Plan 2019, enabling the development of additional grid capacity from renewable energy, natural gas, hydro power, battery storage and coal.

–     We will initiate the procurement of emergency power from projects that can deliver electricity into the grid within 3 to 12 months from approval.

–     The National Energy Regulator will continue to register small scale distributed generation for own use of under 1 MW, for which no licence is required.

–     The National Energy Regulator will ensure that all applications by commercial and industrial users to produce electricity for own use above 1MW are processed within the prescribed 120 days.

It should be noted that there is now no limit to installed capacity above 1MW.

–     We will open bid window 5 of the renewable energy IPP and work with producers to accelerate the completion of window 4 projects.

–     We will negotiate supplementary power purchase agreements to acquire additional capacity from existing wind and solar plants.

–     We will also put in place measures to enable municipalities in good financial standing to procure their own power from independent power producers.

In line with the Roadmap announced last year, Eskom has started with the process of divisionalising its three operating activities – generation, transmission and distribution – each of which will have its own board and management structures.

The social partners organised under Nedlac have been meeting over the last two weeks to agree on the principles of a social compact on electricity.

This is a historic and unprecedented development since it demonstrates the commitment of all social partners to take the necessary actions and make the necessary sacrifices to secure our energy needs.

Through this compact the social partners seek an efficient, productive and fit-for-purpose Eskom that generates electricity at affordable prices for communities and industries.

This requires both a drastic reduction in costs – including a review of irregular contracts – and measures to mobilise resources that will reduce Eskom’s debt and inject fresh capital where needed.

The social partners – trade unions, business, community and government – are committed to mobilising funding to address Eskom’s financial crisis in a financially sustainable manner.

They would like to do this in a manner that does not put workers pensions at risk and that does not compromise the integrity of the financial system.

While they work to finalise this agreement, the reality is that our energy system will remain constrained until new energy generation comes on stream.

Through these immediate measures and the work underway to fundamentally restructure our electricity industry, we will achieve a secure supply of reliable, affordable and, ultimately, sustainable energy.

We undertake this decisive shift in our energy trajectory at a time when humankind faces its greatest existential threat in the form of climate change.

Yesterday I met Ayakha Melithafa, a young climate activist from Eerste Rivier who attended the World Economic Forum in Davos this year to call on world leaders to stand firmly for climate justice.

Ayakha asked me to make sure no African child is left behind in the transition to a low-carbon, climate resilient and sustainable society; and it is a promise I intend to keep.

The Presidential Commission on Climate Change will ensure that as we move towards a low carbon growth trajectory that we leave no one behind.

We will finalise the Climate Change Bill, which provides a regulatory framework for the effective management of inevitable climate change impacts by enhancing adaptive capacity, strengthening resilience and reducing vulnerability to climate change – and identifying new industrial opportunities in the green economy.

Honourable Members,

We need to fix our public finances.

Low levels of growth mean that we are not generating enough revenue to meet our expenses, our debt is heading towards unsustainable levels, and spending is misdirected towards consumption and debt-servicing rather than infrastructure and productive activity.

We cannot continue along this path. Nor can we afford to stand still.

When he delivers his Budget Speech two weeks from now, the Minister of Finance will outline a series of measures to reduce spending and improve its composition.

We are engaged with labour and other stakeholders on measures to contain the public wage bill and reduce wastage.

Efforts to reduce government spending, prioritise resources more effectively, and improve the efficiency of our tax system are important – but insufficient – contributions towards stabilising our public finances.

Achieving sustainability will ultimately require us to address structural challenges in the economy that raise the cost of living and doing business.

By working with the Auditor-General to reduce irregular expenditure, by shifting government spending from consumption expenditure to investment in infrastructure, we aim to improve the state of public finances.

The National Treasury and the SA Reserve Bank are working together to ease pressure on business and consumers.

We have decided to establish a sovereign wealth fund as a means to preserve and grow the national endowment of our nation, giving practical meaning to the injunction that the people shall share in the country’s wealth.

We are also proceeding with the establishment of a state bank as part of our effort to extend access to financial services to all South Africans.

The Minister of Finance will provide details on these in his Budget Speech.

We will be undertaking far-reaching economic reform measures that we will include those contained in the paper produced by National Treasury, entitled ‘Economic Transformation, Inclusive Growth and Competitiveness’.

This year, we are moving from the stabilisation of state-owned enterprises to repurposing these strategic companies to support growth and development.

After years of state capture, corruption and mismanagement, we are working to ensure that all SOEs are able to fulfil their developmental mandate and be financially sustainable.

In consultation with the Presidential SOE Council, we will undertake a process of rationalisation of our state owned enterprises and ensure that they serve strategic economic or developmental purposes.

The extent of capture, corruption and mismanagement in SOEs is best demonstrated at South Africans Airways, which was placed in business rescue late last year.

The business rescue practioners are expected to unveil their plans for restructuring the airline in the next few weeks.

In the interests of South Africa’s aviation industry and our economy, it is essential that a future restructured airline is commercially and operationally sustainable and is not dependent on further government funding.

A key priority this year is to fix commuter rail, which is vital to the economy and to the quality of life of our people.

Our rail network daily transports over a million commuters to and from work.

We are modernising PRASA’s rail network.

The Central Line in the Western Cape and the Mabopane Line in Pretoria have been closed for essential refurbishment and upgrades.

We are investing R1.4 billion in each of these lines to provide, a safe, reliable and affordable service.

Work underway on other lines includes station upgrades, parkway replacements, new signalling systems and overhead electrical traction upgrades.

As we work to fix the capabilities of the state, we know that growth and job creation will in large measure be driven by private enterprise.

We are therefore building an operating environment that is favourable to doing business.

Working together with social partners, we have continued to address several issues that have been barriers to job creation.

Water use licences, which are so essential to operations on farms, factories and mines, have previously taken an inordinately long time to process, sometimes up to 5 years.

We are able to announce that water use licences are now issued within 90 days.

 It used to take months to have a company registered.

Through the Bizportal platform one can now register a company in one day, register for UIF and SARS and even open a bank account,

Our ports are congested and inefficient.

During the course of this year, we will undertake a fundamental overhaul of the Durban port – the third largest container terminal in the Southern Hemisphere – to reduce delays and costs.

The most significant contribution we can make to inclusive economic growth is in the development of appropriate skills and capabilities.

The investments we make now in early childhood development and early school learning will yield great economic benefits in the next two decades – and beyond.

But there are immediate interventions that we are making to improve the quality and the relevance of our educational outcomes.

We are making progress with the introduction of the three-stream curriculum model, heralding a fundamental shift in focus towards more vocational and technical education.

Various technical vocational specialisations have already been introduced in 550 schools and 67 schools are now piloting the occupational stream.

We are building nine new TVET college campuses this year, in Sterkspruit, Aliwal North, Graaff Reinet and Ngungqushe in the Eastern Cape, and in Umzimkhulu, Greytown, Msinga, Nongoma and Kwagqikazi in KwaZulu-Natal.

Through bilateral student scholarship agreements we have signed with other countries, we are steadily building a substantial cohort of young people who go overseas each year for training in critical skills.

We have seen the impact this can have with the Nelson Mandela Fidel Castro Medical Training Programme in Cuba, which has produced over 1,200 medical doctors and a further 640 students are expected to graduate in December 2020.

This programme is a living monument to these two great revolutionaries.

Last year I spoke about our plan to issue tablet computers to school students.

The process of distributing these tablets is underway.

We said that every 10-year-old needs to be able to read for meaning.

Our early reading programmes are gathering momentum.

This year, we will be introducing coding and robotics in grades R to 3 in 200 schools, with a plan to implement it fully by 2022.

We have decided to establish a new University of Science and Innovation in Ekurhuleni.

Ekurhuleni is the only metro in our country that does not have a university.

This will enable young people in that metro to be trained in high-impact and cutting-edge technological innovation for current and future industries.

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