Johannesburg – President Jacob Zuma seems to have failed to impress with Thursday’s State of the Nation Address as commentators say he delivered no real solutions.
This comes despite Zuma’s promises to cut down on state spending, and eliminate fruitless and wasteful expenditure. All sorts of things are going – from trips overseas to one seat of government.
Zuma, acknowledging the doldrums that SA was in as an economy – with growth predicted to come in at less than 1 percent this year and the risk of a downgrade on the horizon – said government was intervening to boost the economy.
He spoke about initiatives to trim red tape, and support small businesses and made the economy the central point of his speech.
Yet, that failed to impress those commenting on social media, with only 4 percent on the conversations dealing with economic aspects, despite the volume of conversations setting new records.
Last night was the toughest SONA Zuma has had to deliver since 2009 with the economy sliding badly, tax revenue expected to be down, and the twin challenges of job creation and eliminating poverty key issues that need to be tackled this year.
Despite the President’s focus on economic woes, and his acknowledgement that the country needs to do something even as emerging-market counterparts are also battling, Lew Geffen Sotheby’s International Realty chairman Lew Geffen says the speech “delivered no surprises and no real solutions to the country’s economic woes”.
Geffen says it is heartening to hear that parliamentarians will be tightening their belts and that there will be some drought relief for five provinces, but on the whole the speech was predictable, uninspiring and not the dynamic recovery plan that citizens desperately needed to hear from their national leader.”
He adds “Zuma was only partly right when he blamed much of the country’s woes on the state of the global economy and its effect on emerging markets as a whole. There is much blame within bloated government structures, though, accompanied by the inevitable attendant haemorrhaging of funds on inadequate services.
“And as much as the government believes that the country remains an attractive international investment prospect, the numbers currently prove otherwise.”
Geffen says he has absolute belief that South Africa will ultimately prevail, though, but only after the ANC realises that the country should be run as a nation and not a political party.
“Under the circumstances property will remain a prime investment because it is a protected financial refuge with guaranteed return on investment. People don’t feel safe at the moment, and they need to invest as best they can to secure their futures in the present economic climate.”
Debt Rescue CEO Neil Roets adds there was been nothing in SONA address that offered any hope that the government understood how dire the financial situation was nor any indications of what they were planning to do about it.
“A clear indication of just how financially distressed South Africans really are is the dramatic increase in the number of people seeking protection from creditors by going under debt review.
“So far this year, we have had almost 120 percent more applicants who sought debt relief through the debt counselling process – one of the really good things that this government did for consumers, many of whom would never have managed to get out from under their mountain of debt were it not for the debt counselling process.”
Roets said the fact that that ratings agencies, including Fitch and Standard and Poor’s, have warned that South Africa’s bonds could be reduced to junk status if the economy was not better managed should serve as a wakeup call for the President and his Cabinet.
“It seems that our newly appointed finance minister, Pravin Gordhan, is doing a passable job but it remains to be seen whether his policies will be able to ward off recession and the downgrading of the country’s credit status.”
Roets says, should rating agencies pull the trigger, the spectre of economic disaster looms large. He notes cost of servicing SA’s bulging R1.8 trillion debt load will spiral; the country will be booted out of the World Government Bond index, making its bonds untouchable; and the capital outflows will be swift and devastating to an investment-starved economy.
“SA Inc is flirting with disaster and is fast approaching an economic iceberg.”
Social media users also did not seem impressed with Zuma’s statements on the economy, as that only accounted for 4 percent of conversations last night.
This comes despite the volume of conversations exceeding those in 2015. Kelvin Jonck, MD of youKnow Digital, says over the past few years, the annual opening of Parliament has been a veritable feast for social media. “#SONA2016 was no different – exceeding last year’s social media participation by 35 percent with a whopping 345 964 on-topic conversations on the day. Compared to general conversation growth of 4.9 percent on social media in South Africa, this is a considerable achievement.”
Most of the conversation took place during the speech, as expected, before dropping off sharply, says Jonck.
Leading up to SONA, most of the conversation focused on MPs who were singing while entering parliament. Between 7-8pm the single biggest conversation topic was “point of order” which gained widespread interest (and even enjoyment) as the EFF and COPE disrupted the sitting. By 8pm, the conversation focus changed to look at “Project Hydrate” (which the president commended) and by 10pm the conversation all but died out, adds Jonck.
The biggest topic of interest from the speech for the social media community was the drought at 25 percent (dominated by comments on government’s inaction) followed by racism and the one capital city discussion, both on 23 percent. “Interestingly, while education was a big topic coming in to SONA2016, it was only the 4th largest point of online discussing during the address itself,” adds Jonck.