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Economy, jobs worry Zuma

Cape Town - President Jacob Zuma signalled concern for the economy and stressed the need to tackle energy and other infrastructure deficits as he delivered his seventh State of the Nation address on Tuesday.

Speaking amid concern for his health after a spell in hospital, Zuma said economic setbacks had left South Africans feeling the sting of poverty.

Job creation was the surest answer but this required measures to speed up spluttering economic growth, he said.

"We have set a growth target of 5% by 2019. To achieve this, we will embark on various measures and interventions to jump-start the economy.

"Change will not come about without some far-reaching intervention," Zuma said, before recommitting to infrastructure spending of R847m despite expected higher borrowing costs in the wake of the country's credit rating downgrade.

"The slow growth has been caused in part by the global economic slowdown and secondly by domestic conditions, such as the prolonged and at times violent strikes, and also the shortage of energy."

Energy needs

Zuma said government would push ahead with nuclear energy generation and shale gas exploration, both strongly contested, but respect environmental laws.

"We need to respond decisively to the country's energy constraints in order to create a conducive environment for growth," he said.

"Nuclear has the possibility of generating well over 9 000 megawatts, while shale gas is recognised as a game changer for our economy. We will pursue the shale gas option within the framework of our good environmental laws."

In a low-key mid-winter opening, Zuma appeared to show the strain of a tough election campaign marked by the Nkandla controversy and acknowledged the damage the five-month mining strike had done to the economy.

He said he would personally become involved in trying to stabilise the embattled sector.

"Given the impact of the untenable labour relations environment on the economy, it is critical for social partners to meet and deliberate on the violent nature and duration of the strikes."

Mining industry focus

The president said he would take over guardianship of the framework agreement for a sustainable mining industry, forged under the leadership of then deputy president Kgalema Motlanthe last year, and see that it implements a plan to improve services to mining towns.

"The focus is the mining areas of Matlosana, Emalahleni, Sekhukhune, Lephalale, West Rand, and Matjhabeng."

But he warned mining houses that government would monitor their progress on improving living conditions at mines, along the targets set out in the Mining Charter.

"We urge the companies to meet the 2014 deadline for these targets and extend this right to dignity to mineworkers."

He reiterated a pledge made earlier this year that the state's expanded public works programme would provide six million job opportunities by 2019, and said the local government-based community work programme would be expanded to account for a million of these.

Job creation

Government would help boost youth employment by increasing the number of interns in all state departments, Zuma said. He pointed to the success of the youth employment tax incentive in giving 133 000 people in the private sector work in five months.

"It remains our strong belief that the most effective weapon in the campaign against poverty is the creation of decent work, and that creating work requires faster economic growth."

Along with unemployment and poverty, the country needed to tackle gaping income inequalities persisting 20 years after the end of apartheid.

To this end, Zuma said government would deliberate a national minimum wage and mandated Deputy President Cyril Ramaphosa to lead talks on the subject within the ambit of Nedlac.

As he did in his inaugurations speech, Zuma pledged government's commitment to the National Development Plan, and the Industrial Policy Action Plan.

He said the state's economic rescue plans included promoting local procurement by making sure the state bought three-quarters of goods and services from local suppliers.

"We will utilise the renewable energy sector, the manufacturing of buses, Transnet's R50bn locomotive contracts and Prasa's passenger rail projects, among others, to promote local content and boost growth."

Acknowledgement of failings

Energy security would mean scrutinising Eskom's role, accelerating the fraught construction of the Medupi coal station, and ensuring the country had a sustainable mix of energy sources.

Zuma acknowledged the failings of local government and listed several municipalities where government would intervene to resolve infrastructure and delivery problems, often with the help of the Development Bank of Southern Africa.

New Democratic Alliance parliamentary leader Mmusi Maimane said Zuma had missed the opportunity to announce bold steps, notably on energy production.

"The president had the opportunity to bring strong ideas, some very bold steps, and I didn't see that forthcoming," he said.

Economic Freedom Fighters leader Julius Malema said the speech was mediocre and promised nothing new.

"There is nothing exciting except a blowing of hot air and a repetition of the things that we have heard before," said Malema, who attended the opening in a red boiler suit and gum boots.

ANC treasurer general Zweli Mkhize said Zuma addressed the main problems facing the country.

"He spoke about getting involved to stabilise the labour front, and on getting more investments," said Mkhize.

"He spoke of rebuilding local government where there is corruption. The speech has taken care of all of this."
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