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It's the economy, says Zuma

Feb 09 2012 22:44

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Cape Town - President Jacob Zuma put the economy at the centre of his State of the Nation address on Thursday, and pledged to extend government's infrastructure drive to stimulate growth and create jobs.

Zuma claimed modest success midway through his term in office but conceded that unacceptable levels of unemployment, poverty and social inequality continued to plague the country.

"The triple challenge of unemployment, poverty and inequality persists, despite the progress made. Africans, women and the youth continue to suffer most from this challenge."

He told Parliament government saw its role as guiding the economy to grow faster and announced steps to stimulate mining, integrate rail and road infrastructure and help exporters.

This will see the launch of five infrastructure projects - notably developing rail and road infrastructure in Limpopo, Mpumalanga and North West to serve the mining sector better and creating an economic corridor linking Johannesburg and Durban to the country's seaports.

The Eastern Cape would benefit from a drive to improve its industrial and agricultural sectors and maximise their export capacity, he said.

"For the year 2012 and beyond, we invite the nation to join government in a massive infrastructure development drive," he said.

Zuma announced that Transnet's Market Demand Strategy would see R300bn invested in capital projects over the next seven years, of two thirds will go on rail projects and the rest on ports.

He promised that a deal between port authorities and Transnet would save exporters about R1bn and said he was pressing Eskom to put the brakes on power price hikes to help both business and the poor.

"We need an electricity price pact," he said.

"I have asked Eskom to seek options on how the price increase requirement may be reduced over the next few years.

"We need an electricity price path which will ensure that Eskom and the industry remain financially viable and sustainable, but which remains affordable especially for the poor."

Looking back on 2011, Zuma said his government's policies like the New Growth Path had been vindicated by the biggest reduction in joblessness since the global economic meltdown in 2008.

"The results are encouraging though we are not out of the woods yet given the global situation," he said.

"The work done last year indicates that if we continue to grow reasonably well, we will begin to write a new story about South Africa - the story of how, working together, we drove back unemployment and reduced economic inequality and poverty.

"It is beginning to look possible. We must not lose this momentum."

The president noted that last year, a total of 365 000 people were employed and said its was important that all of these were in the formal sector of the economy.

"There are two main things that we did right in 2011 which are contributing to this joint success. Firstly, we mainstreamed job creation in every government entity including state owned enterprises.

"Secondly, we strengthened social dialogue and co-operation between government, business and the community sector."

Zuma heralded progress in health, education, crime reduction and rural development but warned that the pace of land redistribution was "slow and tedious" and that the willing buyer-willing seller option was not working.

"We have only distributed 8% of the 30% of land redistribution for 2014 that we set ourselves.

"The process is slow and tedious and there is general agreement that the willing buyer- willing seller option has not been the best way to address this question," he said, to loud applause from MPs.

After a year in which his leadership was tested but he emerged strengthened, Zuma struck an inclusive note when he spoke of the ANC's centenary.

He thanked every leader of the party from its inception, including his predecessor and rival Thabo Mbeki, who was not present on Thursday.

He also paid tribute to Black Consciouness leader Steve Biko and apartheid-era opposition stalwart Helen Suzman.

"In marking this occasion we are recognising the work of all South Africans in bringing about a truly free non-racial, non-sexist, democratic and prosperous country."

Democratic Alliance Parliamentary leader Lindiwe Mazibuko said it was a mystery how Zuma planned to fund the infrastructure drive as she believed the state was R300bn shy of the cash needed.

"It is just not clear where the money is going to come from."

DA leader Helen Zille welcomed the focus on economic growth and Congress of SA Trade Union secretary general Zwelinzima Vavi said the infrastructure programme was cause for optimism on jobs.

"[It] will do a lot to help the government reach the target of creating five million jobs," Vavi said.

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