In delivering this year’s SONA, the president will need to tread a fine line between fiscal prudence and popularity, given that we are in an election year. He will be reluctant to give public sector wage growth, labour market reforms, or the need for spending constraints a lot of airtime, given that these will probably not go down well with his constituency, and will likely spend more time on areas where he feels government has successfully delivered on its promises during 2023. He’ll also seek to provide a compelling vision for the future of the country.
The speech should offer a glimpse into the government’s vision and priorities, and we expect National Health Insurance, the Social Relief of Distress grant, infrastructure development, employment, energy, water security, skills development, and the 2024 election date all to feature prominently.
National Health Insurance (NHI)
The National Health Insurance (NHI) remains central to the government’s proposed healthcare reforms. The government’s commitment to universal healthcare, improvements in healthcare infrastructure, and ensuring equitable access to quality medical services are expected to take centre stage. Transparency regarding funding mechanisms and collaboration with healthcare professionals will be pivotal as the government seeks public support for this transformative healthcare initiative. As widely reported, we expect the president to make an announcement around signing this into law ahead of elections.
Social Relief of Distress (SRD) Grant
Given our high unemployment rate, there has been a lot of debate around the SRD grant, which is a vital lifeline during economic hardships. It is reasonable to expect insights into its continuation or potential evolution. We might end up with a situation where the SRD grant gets extended, but under a new name.
Transnet, Rail Networks, and Ports
Many observers will be looking for updates on the government’s vision for Transnet, spanning infrastructure development, efficiency enhancements, and strategies to bolster global competitiveness. A resilient rail network and efficient ports are vital components for economic growth, and the SONA provides a platform to communicate the government’s commitment to these critical facets of the nation’s infrastructure. We expect more announcements around increasing rail capacity, passenger rail, and capacity at the ports.
Unemployment and Job Creation
Unemployment remains a persistent challenge, particularly for the young, and job creation is essential for fostering economic growth. The president will probably touch on strategies for tackling unemployment and promoting job creation, with likely emphasis on skills development, entrepreneurship, and collaboration with the private sector.
Load Shedding, Energy Crisis, and Energy Security
The challenges facing state-owned electricity supplier Eskom have had significant implications for the nation’s energy security for several years now. Businesses and households will look for reassurance that loadshedding will rescind over time. We should expect announcements around initiatives to curb loadshedding, and transparency in restructuring initiatives, investments in renewable energy, and measures to enhance Eskom’s financial viability will be crucial for instilling confidence in the government’s ability to address this critical issue.
Water security is fundamental, and therefore plans around water scarcity, improved water infrastructure, and ensuring access to clean water for all may feature prominently. The SONA provides an opportunity to communicate comprehensive strategies for sustainable water management and conservation.
Skills Development, Training, and Education
Investments in education and skills development are critical for economic growth. The government will likely seek to underscore its commitment to improving the education system, enhancing skills development programs, and aligning education with the needs of the job market.