DIVIDED: President Jacob Zuma during his state of the nation speech on Thursday. He outlined plans to boost the economy, but cannot take actions that will further alienate his own party. Picture: TREVOR SAMSON
DIVIDED: President Jacob Zuma during his state of the nation speech on Thursday. He outlined plans to boost the economy, but cannot take actions that will further alienate his own party. Picture: TREVOR SAMSON

AS PRESIDENT Jacob Zuma took to the podium last Thursday, he must have known that he was bound to disappoint most South Africans.

The most imaginative hoped for a resignation. That was never going to happen. Some wished for an apology for the government’s handling of the Nkandla saga or for the debacle at the finance ministry. Apologies are not unheard of as state of the nation material. President Thabo Mbeki apologised for load shedding in his 2008 address, on behalf of Eskom and the government. Politicians are very careful as to what they apologise for.

Still others expected a bold, inspiring message about how the government would steer the country away from economic disaster. But this would have to come in the context of serious missteps in economic governance and implementation. Even if the president laid out plans for a glittering economic future, there would have been many lingering questions.

This is not to say that the drafters of the speech were unaware of their obligations. Mr Zuma articulated a clear pro-growth stance to guide the economy. There were words about the global economic climate and he owned up to domestic constraints within the government’s control. Even a shout-out to profit-making made it into the final edit.

There were some pointed assurances but the damning thing about these kinds of statements is that they have to be said at all. The minimum wage should not be set at a level that imperils job creation. The nuclear build programme will be within the pace and scale that the country can afford. Investors will receive support.

The recommendations of a report on state-owned enterprises, released four years ago, would be implemented. In a sophisticated, middle-income economy, these are things that should be taken for granted. This is not fighting talk. This was a careful dose of reluctant realism.

It is good that the president accounted for each bullet point of the nine-point plan presented in 2015. Even on the most generous reading, the plan has not taken the economy much further. The many outcomes that are listed in the speech should be taken in context.

The manufacturing sector recorded zero percent growth in 2015. Mining production fared well for the year (up by 3.3% over 2014) but recorded negative year-on-year growth rates for the last four months of 2015. The unemployment rate hasn’t budged and sits at 25.5%.

Not long ago, new commissioners for the National Planning Commission were appointed. By some accounts, they are off to a good start, hard at work to think of ways to improve the implementation of the National Development Plan. Yet the plan hardly came up in the speech. The most notable remark about the plan was negative, to point out that the growth rate target of 5% by 2019 will be missed.

The World Bank released a report this month reinforcing the message that SA’s challenges require a deepening of microeconomic reforms such as competition policy. This has been the refrain from bodies such as the Organisation for Economic Co-operation and Development, International Monetary Fund and World Bank. Bolstering the economy is an important short-term goal in the face of imminent downgrades.

The CEOs who met with the government need an environment in which they can invest and grow. To do right by the millions of the unemployed and new entrants to the economy requires creating the equivalent of another South African economy within a generation; with new, dynamic firms. For every established firm that exists, entrepreneurs need to create another.

This is the kind of audacious goal the country could rally behind. The kind of environment that policy should strive to nurture. The leader of the nation has presented damage-control measures. This will do for now, but not for much longer.

Makhaya is CEO of Makhaya Advisory.