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MEDIA STATEMENT – BLSA Response to the Opening of Parliament Address by President Cyril Ramaphosa on 18 July 2024

18/07/2024 | By Admin

Business Leadership South Africa (BLSA) commends President Cyril Ramaphosa on his first opening of Parliament address since the formation of the Government of National Unity (GNU). It signals a continuation of the positive reforms that were started in the previous administration. “His message of unity and working together to solve South Africa’s pressing challenges is well received and we look forward to working with government leaders to achieve this,” said BLSA CEO Busisiwe Mavuso following the speech.

President Ramaphosa said the election made it clear that political parties needed to unite, cooperate and form a partnership to solve the triple challenges of poverty, inequality and unemployment – which it has achieved through the formation of the GNU. “We support the approach of collaboration, as the business sector – through BLSA – has been working closely with government to solve these challenges with a similar approach,” said Mavuso.

President Ramaphosa confirmed that a Medium-Term Development Plan is still being developed to guide the administration’s focus areas over the next five years, meaning this address did not contain government’s complete forward-looking vision of the GNU-led government. “He highlighted a minimum strategic plan that has been agreed upon within the cabinet,” said Mavuso. “The address highlighted government’s intention of prioritising and focusing on key reforms already underway, with added attention being paid to local government. We look forward to the development of an updated plan to unlock further opportunities that will better respond to our country’s various crises.”

The Seventh Administration will focus on three priority areas: first on inclusive growth and job creation, second to reduce poverty and tackle the high cost of living and third to build a capable, ethical and developmental state. “These priority areas will enable the GNU to focus on their common goals and should ensure the various political parties can work together to achieve these broad objectives,” said Mavuso.

The president emphasised the need to resolve challenges faced by many municipalities across the country. “Municipalities are in dire need of assistance to overcome the many challenges they face, from water infrastructure to waste management,” said Mavuso. “The focus on appointing capable and qualified people to senior positions in municipalities should be applauded.”

President Ramaphosa said that government will focus on ensuring the institutional structure and funding model for local government is fit-for-purpose, and that municipalities are financially and operationally sustainable. “We have seen the impact indebted municipalities have on the overall system, including the electricity and water sectors,” said Mavuso. “This focus is critical to enable the success of key socio-economic reform objectives.”

The president said that government will continue to pursue a macroeconomic policy that supports growth and development, in a stable and sustainable manner. The focus on managing public finances to stabilise debt is welcomed by BLSA. Reducing the cost of servicing debt is vital to ensure the economy is stabilised and attracts foreign direct investment.

The second phase of Operation Vulindlela (OV) will focus on the local government system, the delivery of basic services, digital public infrastructure, and public land for social housing. Existing areas of reform, such as water, electricity and logistics will also receive continued attention. BLSA welcomes the positive focus on OV concluding the outstanding issues from its first-term agenda. The second-term agenda needs to be more tightly focused.

We agree that an integrated and comprehensive poverty alleviation strategy is required. The president said the cost-of-living increases are of concern and as such government will aim to expand VAT exemptions and will review the fuel price formula to find areas to reduce prices.  This approach will be an important way to alleviate poverty and spark economic growth.

BLSA welcomes government’s job creation focus on processing minerals to enable the country to export finished products rather than raw commodities, as well as its focus on labour-intensive sectors such as services, agriculture, green manufacturing and tourism.

“Importantly, the prioritisation of skills attraction and development, as well as visa reforms to enable this, are critical to solving South Africa’s triple challenges,” said Mavuso. “We support the president’s pledge that where skills are unavailable, we need to attract people with the appropriate qualifications and experience through an attractive visa programme.”

There will be continued focus on the Freight Logistics Roadmap to transform South Africa’s freight logistics system through the National Logistics Crisis Committee. This reform process requires speedy implementation and BLSA will continue to support this.

Turning to infrastructure, President Ramaphosa said that South Africa will drive a more holistic and integrated infrastructure process with the aim of scaling investment. “Infrastructure South Africa has made important progress since it was established in 2020 and we look forward to working with this team to significantly scale infrastructure investment, with a focus on project preparation – which is a key area that requires attention,” said Mavuso. “The focus on simplifying regulations on public-private partnerships has already started and this continuation is important going forward.”

BLSA welcomes Ramaphosa’s continued drive for renewable energy growth through the lens of the just energy transition, with a focus on developing the green manufacturing sector. BLSA believes that there needs to be added focus on providing clear policy strategies and implementation plans to enable the green hydrogen, electric vehicles and renewable energy component sector.

BLSA notes the new centralised ownership model for state-owned entities (SOEs) to improve accountability, transparency, governance and oversight, and reduce inefficiency and corruption. “This process requires important oversight to implement the strategy to ensure Ramaphosa’s intentions are correctly realised,” said Mavuso.

The President said that government will bring stakeholders together to resolve differences and clarify misunderstandings around the National Health Insurance. BLSA welcomes his willingness to reopen these engagements and looks forward to contributing to a workable solution.

BLSA applauds government’s continued focus on crime and corruption which requires capable, sophisticated and independent law enforcement agencies. As the president said, the fight against illegal mining, gang violence, cash-in-transit heists and the construction mafia must be prioritised to ensure our economic gains are not eroded.

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