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Ramaphosa SONA financial roundup - 7 key takeaways

Feb 16 2018 22:15
Fin24 team
President Cyril Ramaphosa delivers his inaugural S

President Cyril Ramaphosa delivers his inaugural State of the Nation Address. (Photo: Ruvan Boshoff, AFP)

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Cape Town – Seven key financial takeaways from President Cyril Ramaphosa's maiden State of the Nation Address. 

1. New commissions and task teams

SA’s new president announced an investment summit, a jobs summit, and a number of working groups to investigate and attempt to grow the SA economy.

2. No news on Cabinet changes

Despite some speculation beforehand, the president did not use his SONA to address the question of whether, when and how he would be reshuffling former President Jacob Zuma’s last Cabinet. 

The president did say, however, that he would initiate a review the of configuration, number and size of state departments. 

3. State owned enterprises 

Ramaphosa promised to "intervene decisively to stabilise and revitalise state owned enterprises” saying that South Africans could look at his intervention at Eskom for an indication of what to expect. 

The president had in January, when he was still deputy president, ordered Eskom to appoint a new board and fire all executives accused of corruption and maladministration.

“These SOEs cannot borrow their way out of their financial difficulties, and we will therefore undertake a process of consultation with all stakeholders to review the funding model of SOEs and other measures,” he said, adding that boards would be professionalised and barred from any role in procurements. 

4. Land expropriation 

The decision to expropriate land without compensation, taken by the ANC at its 54th Congress, where Ramaphosa was elected ANC President, would be state policy, the president confirmed. 

He said expropriation would be part of a “comprehensive approach that makes effective use of all the mechanisms at our disposal” and should boost agriculture production, not lead to a decline. 

5. Mining 'impasse'

The president promised to break the “impasse” over the controversial Mining Charter, which has been criticised by mining industry bodies.

He said his government would seek to ensure that the Charter was a “truly an effective instrument to sustainably transform the face of mining in South Africa”. 

“By working together, in a genuine partnership, underscored by trust and a shared vision, I am certain we will be able to resolve the current impasse and agree on a Charter that both accelerates transformation and grows this vital sector of our economy,” he said.

6. SARS investigation 

Ramaphosa will appoint a commission of inquiry into tax administration and governance into the South African Revenue Service (SARS).

The commission, requested by the finance minister, will ensure that the credibility of SARS is restored, as well as its capacity to meet revenue targets.

“We must understand that tax morality is dependent on an implicit contract between taxpayers and government that state spending provides value for money and is free from corruption,” he said.

7. Fee free education 

Ramaphosa said that the finance minister would be clarify how the SA fiscus would be able to afford free higher tertiary education in the Budget Speech on Wednesday. 

“Starting this year, free higher education and training will be available to first year students from households with a gross combined annual income of up to R350 000,” he said. 

“The Minister of Higher Education and Training will lead the implementation of this policy, while the Minister of Finance will clarify all aspects of the financing of the scheme during his Budget Speech next week.”

* Update on February 17 at 14:05. This article has been updated to include what President Ramaphosa said about government departments. 

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sona 2018  |  cyril rama­phosa  |  tax  |  sa economy
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