Government puts shoulder to the wheel to build a thriving economy

Growing the economy and job creation are at the top of the seventh administration’s agenda, President Cyril Ramaphosa said on Thursday.

“We want a nation with a thriving economy that benefits all. To create this virtuous cycle of investment, growth and jobs, we must lift economic growth to above three percent,” the President said, as he delivered the State of the Nation Address (SONA) in Cape Town.

In the first SONA of the seventh administration, the President said government has adopted the Medium-Term Development Plan, which sets out a clear and ambitious programme for the next five years.

The actions contained in the plan advance three strategic priorities: driving inclusive growth and job creation; reducing poverty and tackling the high cost of living as well as building a capable, ethical and developmental state.

“To achieve higher levels of economic growth, we are undertaking massive investment in new infrastructure while upgrading and maintaining the infrastructure we have.

“We are engaging local and international financial institutions and investors to unlock R 100 billion in infrastructure financing. A project preparation bid window has been launched to fast-track investment readiness.

“This includes revised regulations for public private partnerships, which will unlock private sector expertise and funds,” the President explained.

Focus on infrastructure

Over the next three years, government will spend more than R940 billion on infrastructure. This includes R375 billion in spending by state owned companies.

“This funding will revitalise our roads and bridges, build dams and waterways, modernise our ports and airports and power our economy. Through the Infrastructure Fund, 12 blended finance projects worth nearly R38 billion have been approved in the last year.

The aim of the Infrastructure Fund is to use committed government funding to leverage much higher levels of private sector investment in public infrastructure. Managed by Infrastructure South Africa, the fund is a portfolio of blended finance projects and programmes. 

“These are projects in water and sanitation, student accommodation, transport, health and energy. Construction of the Mtentu Bridge continues. This bridge will rise above the river between Port Edward and Lusikisiki, and will become the tallest bridge in Africa,” the President said.

The Polihlali Dam will feed 490 million cubic metres of water a year from the Lesotho Highlands into the Vaal River System, securing water supply to several provinces for years to come.

In addition, government is working with international partners to revitalises small harbours and unlock economic opportunities for coastal communities.

“We are steadily removing the obstacles to meaningful and faster growth,” he said.

Operation Vulindlela

As government continues to implement economic reforms through Operation Vulindlela, the President said a new sense of optimism and confidence in the economy has been created.

“We have made progress in rebuilding and restructuring a number of our network industries. We are seeing positive results in the improvement of the functioning of our network industries as well as the investment opportunities that are opening up and are being taken by investors leading to job creation. 

“Working together with business, labour and other social partners we must now finish this work. Over the coming year, we will initiate a second wave of reform to unleash more rapid and inclusive growth,” the President said.

Operation Vulindlela is a joint initiative of the Presidency and National Treasury to accelerate the implementation of structural reforms and support economic recovery.

The initiative aims to modernise and transform network industries, including electricity, water, transport and digital communications.

“Our immediate focus is to enable Eskom, Transnet and other state-owned enterprises that are vital to our economy to function optimally. 

“We are repositioning these entities to provide world-class infrastructure while enabling competition in operations, whether in electricity generation, freight rail or port terminals.

“We continue with the fundamental reform of our state-owned enterprises to ensure that they can effectively fulfil their social and economic mandates.”

READ | New wave of reforms to propel SA economy

This includes the work underway to put in place a new model to strengthen governance and oversight of public entities. 

“We will ensure public ownership of strategic infrastructure for public benefit while finding innovative ways to attract private investment to improve services and ensure public revenue can be focused on the provision of public services,” the President said.

Meanwhile, government is in the process of establishing a dedicated State-Owned Enterprise (SOE) Reform Unit to coordinate this work. 

Energy Action Plan

“The measures we have implemented through the Energy Action Plan have reduced the severity and frequency of load shedding, with more than 300 days without load shedding since March 2024.

“While the return of load shedding for two days last week was a reminder that our energy supply is still constrained, we remain on a positive trajectory. 

“We now need to put the risk of load shedding behind us once and for all by completing the reform of our energy system to ensure long-term energy security.”

The President said the Electricity Regulation Amendment Act, which came into effect on 1 January, marks the beginning of a new era.
 

READ | President Ramaphosa signs Electricity Regulation Amendment Act into law

The act sets out far-reaching reforms of the country’s electricity sector, including the establishment of a competitive electricity market.

“This year, we will put in place the building blocks of a competitive electricity market. Over time, this will allow multiple electricity generation entities to emerge and compete.

“We will mobilise private sector investment in our transmission network to connect more renewable energy to the grid,” Ramaphosa said.

Rail network

The President said Transnet’s performance has stabilised and is steadily improving.

“We released a Network Statement in December 2024 which, for the first time, will enable private rail operators to access the freight rail system

“Open access to the rail network will allow train operating companies to increase the volume of goods transported by rail, while our network infrastructure remains state owned,” the President said.

This will ensure that South African minerals, vehicles and agricultural produce reach international markets, securing jobs and earning much needed revenue for the fiscus.

New cranes and other port equipment are being commissioned to speed up the loading and unloading of cargo and reduce waiting times for ships at ports. –SAnews.gov.za

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