There is still much “unfinished business” on the national agenda, including a more coherent overall economic plan for much higher job-rich inclusive growth.
In commenting on the 2024 State of the Nation Address (SONA), Prof Raymond Parsons, economist from the North-West University (NWU) Business School, points out that, as expected, prior to the 2024 elections the SONA was inevitably largely a party-political statement and also took stock of the government’s achievements over the decades.
“There were nonetheless highly familiar features of the comprehensive address that require critical assessment as to whether certain outcomes have actually been realised.”
He says the SONA acknowledged the importance of expediting solutions in collaboration with the business sector and civil society to overcome the serious ongoing obstacles that continue to weaken the country’s economic performance. In particular, the partnership with business in resolving the wide-ranging problems of energy, logistics and crime and corruption must remain the highest priority.
“A large part of the economic resilience South Africa has nevertheless exhibited so far clearly owes a great deal to the positive engagement and commitment of the private sector in expediting public delivery.”
Prof Parsons says that, beyond the broad expectations of the SONA, the tough financial realities and difficulties in the Budget on February 21 nonetheless remain. Fiscal space has now shrunk markedly. A strong combination of weak growth, rising debt and excessive spending has posed serious risks to the fiscal outlook. Given the unresolved fiscal vulnerabilities apparent in the medium-term Budget in November 2023, the bar will be set high for the main Budget later this month.
“The 2024/25 Budget needs to embody tangible outcomes that build credibility against a background in which fiscal targets have consistently been missed. South Africa is already at the outer limits of what it can reasonably do to curtail its debt burden and stabilise its public finances. This is where the big challenge now lies in the aftermath of the SONA and for South Africa’s future risk premium.”
