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PODCAST with Annabel Bishop
The 2019 State of the Nation Address (SONA) focused on reviving economic growth and investment with enhanced policy certainty and confidence-boosting measures. Investec's Chief Economist unpacks the substance of it all.

SONA 2019 reaffirmed the key economic policy objective of reviving fixed investment rates to place the economy on a sustainable faster economic growth path. Economic growth has stagnated at an average of below 2% for nearly a decade, but needs to be closer to the 3 - 5% mark in order for unemployment rates to recede from close to 30% presently, for poverty alleviation and for fiscal sustainability. The President emphasised the importance of collaboration between government, business and organised labour to aid effective implementation of infrastructure projects.


Restoring confidence through improved legislative and regulatory clarity and enhancing the ease of doing business is integral to a recovery in fixed investment by the private sector. The President noted the progress made over the last year in mining sector regulation. Going forward, policy areas to be addressed will include competition, the visa regime, the allocation of the broadband spectrum and the submission of the National Health Insurance Bill to parliament.


However, uncertainty relating to property rights is likely to persist for now. Although the President reiterated that the land reform programme would be accelerated, and the intention remains for agricultural output to be increased and food security protected, the methodology of land expropriation without compensation was not detailed.

President Ramaphosa and Finance Minister Tito Mboweni
Get all Investec's insights on the latest Budget Speech and SONA

Our economists, tax experts, personal finance and investment experts unpack what the latest fiscal measures mean for income, savings and daily expenses of individuals and businesses.

JOINT SITTING : Debate on President’s SONA Address, 13 February 2019

Parliament of the Republic of South Africa

The SONA outlined further steps to unwind state capture and deal with corruption in an effort to rebuild institutional strength. 


In parallel to the existing efforts to strengthen governance at many of the state-owned enterprises (SOEs), the SONA set out policy actions to shore up the weak financial position of Eskom in particular. These actions will include the unbundling of Eskom into separate entities of generation, transmission and distribution. The President affirmed that government will extend financial support to Eskom, although the quantum was not specified. 


The forthcoming 2019 Budget (20th February 2019) will contain the details of the financial support extended to Eskom. The SONA did highlight the “need to safeguard our national fiscal framework” and “achieve a positive impact on our sovereign credit rating”. As such, the Budget is not expected to show further fiscal slippage versus the 2018 Medium Term Budget Policy Statement. 


The President announced that the national and provincial elections will take place on the 8th May 2019. As 2019 is an election year, there will be a second State of the Nation Address. In prior years this usually occurred in the month of June.

JOINT SITTING Reply by President on the debate on SONA, 14 February 2019

Parliament of the Republic of South Africa

JOINT SITTING Reply by President on the debate on SONA, 14 February 2019

Parliament of the Republic of South Africa

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    Focus and its related content is for informational purposes only. The opinions featured on the site are not to be considered as the opinions of Investec and do not constitute financial or other advice. The information presented is subject to completion, revision, verification and amendment.