President Cyril Ramaphosa’s wide-ranging State of the Nation Address (SONA) agenda that confirms the tangible commitment of the Government of National Unity (GNU) to faster and higher job-rich growth is positive.

In commenting on the SONA, which was delivered on 7 February, Prof Raymond Parsons, economist of the NWU Business School, says the South African economy is indeed eventually capable of even much higher economic growth than 3% if the right choices are made.

“The present slow and uneven economic recovery nonetheless illustrates the extent to which accelerated structural reforms are urgently needed if South Africa is to even reach a 3% gross domestic product (GDP) growth by 2027.”

Prof Parsons says achieving the socioeconomic targets outlined in the SONA will therefore depend heavily on the accelerated implementation of growth-friendly policies and projects, better governance and less corruption at various levels, and ensuring that the country’s vulnerable public finances are properly stabilised.

“The SONA recognises that it will indeed also be essential to harness the participation of the business sector on an even bigger scale to reach much higher job-rich growth. Stricter timelines would be helpful to expedite the delivery of the much higher infrastructural spending emphasised in the SONA.”

Prof Parsons says on the global front, the SONA recognises the extent to which 2025 is going to be a roller-coaster year of change for many economies, including South Africa. As a small open economy, South Africa needs to play its cards smartly and, in particular, make its economy as “Trump-proof” as possible.

“South Africa’s economy needs to remain globally competitive in order to deal with both the risks and opportunities of a shifting geopolitical scenario. The SONA emphasises the extent to which South Africa’s hosting of the G20 this year is a big opportunity to ‘showcase’ the South African economy.”

Prof Parsons explains that the SONA thus seeks to advance the progress made by the Government of National Unity (GNU) to date.

“The overall challenge for GNU policy is now to build on the existing better short-term business confidence and convert it into long-term investor confidence. It is elevated investment that enables more growth. A clear and predictable policy environment and a high degree of policy certainty from now on will encourage business to take a long-term perspective on growth and development in South Africa,” he concludes.