SONA 2017: A “boxing match” between Zuma and the business sector

[et_pb_section bb_built=”1″ fullwidth=”off” specialty=”off” _builder_version=”3.0.63″][et_pb_row _builder_version=”3.0.63″ background_position_1=”top_left” background_repeat_1=”no-repeat”][et_pb_column type=”4_4″][et_pb_text _builder_version=”3.0.64″ background_layout=”light” text_orientation=”left” border_style=”solid”]

In what can only be described as one of the most disturbing parliamentary sessions in South African history, the 2017 State of the Nation Address (SONA 2017) will be remembered for President Jacob Zuma’s passive economic message along with flying fists between parliamentary officials and members of the EFF.

The message that has been made abundantly clear is that the Constitution ranks second to the Rules of Parliament.

Despite all the violence, Zuma’s speech, as expected, was mostly about a more aggressive stance on the implementation of land reform by accepting and implementing the long-debated Land Expropriation Bill. The bill has been referred back to Parliament due to a lack of proper public participation. Once enacted this legislation will put private property ownership in jeopardy, creating a ripple effect that will cause foreign investment within the country to shrink. This could pave the way for an inevitable rating downgrade, which was barely circumvented in December 2016.

Zuma also advised land claimants to accept the restitution of claimed land, rather than financial compensation. This is an ill-advised comment for Zuma to make as, in some land claims, it is impossible for land to be transferred to claimants where property has been extensively developed either by private individuals, parastatals such as the South African National Roads Agency, or the state itself. Transfer of such property will have great financial implications for the state that will have to compensate property owners for such transfers to take effect.

Radical social economic transformation therefore seems to be the way in which Zuma wishes to steer the country’s economy. However, if economic growth is to be established, a flourishing environment for businesses to develop is required. Instead Zuma is seeking to implement policies that undermine private property ownership and the principle of a free market and seeks to alienate white business owners. This undermines the concept of an inclusive economy in which everyone can participate and which is beneficial to all.

Regarding National Health Insurance (NHI) Zuma indicated that South Africans find themselves in the first preparatory phase of the scheme’s implementation, which commenced in 2012 and should be fully operational by 2026. Even though NHI may seem to be a positive concept, the deaths of 94 mentally ill patients confirm that the Department of Health is nowhere near capable of managing the health of the entire South African populace.

“Zuma has made it clear that radical social economic transformation will be the next step in South Africa’s economic future. His statement that the government’s intent is to make the economy more inclusive is however a farce. What the ANC rather seeks to achieve is to make economic participation more beneficial to some, whilst marginalising other groups. The future threats toward the private business sector are real and should not be underestimated. Private property ownership for example will come under more severe pressure as time progresses,” says Armand Greyling, Law and Policy Analyst at AfriBusiness.