The reality of corruption, employment legislation and concern regarding foreign investment because of uncertainty over property rights questions the feasibility of the suggestions made by President Cyril Ramaphosa during last night’s State of the Nation address (SONA).
He emphasised plans furthering job creation and economic growth. Pres Ramaphosa confirmed government’s “attention, policies and programmes” are focused on the key parts of the economy that are labour intensive. This includes agriculture, tourism and ocean economy.
He expressed the intention to develop agriculture “to the benefit of all”.
“For outsiders not familiar with the realities of South Africa, the president’s address could be seen as positive,” says Louis Meintjies, the president of TLU SA. “But in reality it precipitates a wealth of questions and challenges.”
“Where will the money for all his plans come from?” Meintjies wants to know. “The president again emphasised last night the approach to economic recovery is not through spending it out of trouble, but to accelerate economic growth.”
Agriculture is, according to the president, an important source of income for the country. In the coming year there will be focused on the development and strengthening of agricultural products with high export potential. He says the development of the agriculture industry is very important to attract investment.
“But just this week the country was up in arms after reports reminded us how the five biggest investment countries identified corruption and policy uncertainty as a serious threat to foreign investment in June 2018,” Meintjies explains. “Ramaphosa feels these concerns have been dealt with and there is indeed certainty over policies which can influence investments. In January he ensured investors at the World Economic Forum the Reserve Bank will be left alone, but then Deputy President David Mabuza admitted in parliament government is planning to change the Reserve Bank’s mandate and remove some of its independence.”
The investing countries also stated concern over the implications of land expropriation without compensation holds for private property rights. But during the SONA President Ramaphosa emphasised the revision of Section 25 of the Constitution relating to expropriation without compensation. Government feels this will help to improve output and strengthen the economy.
The president said that job creation is one of the most important fields to receive attention. The agricultural industry, however, experiences difficulty in employing farmworkers because of employment legislation like the national minimum wage, despite the president’s assurance that it would not lead to job losses.
Pres Ramaphosa further stated skills development and programmes to build capacity will be prioritised specifically for smallholders and emerging black farmers.
“The commercial farmer, the anchor and foundation of the economy and food security, is not on his agenda,” says Meintjies. “One would expect the president to make an ally out of the agricultural industry when he can recognize the value of it to the economy. But he handles us with disdain even though there is good will from our side.”
It is unclear to TLU SA how the president will curb corruption, especially pertaining to agriculture. This week a R220 million allocation for drought relief in KwaZulu-Natal made in 2015 could still not be accounted for. It did not reach farmers.
“Summits for job creation can be hosted, plans can be announced for education and promises made about better lives for the poor. But if agriculture is not supported correctly, it is all a waste,” explains Meintjies. “The president dreams up beautiful dreams for our country, but if the commercial farmer is not protected, it is going to turn into a nightmare.”