#SONA2025: SA's future at stake in impending energy and trade address

Source: Reuters/2023. President Cyril Ramaphosa.

Deputy Minister Kenny Morolong expressed hope that the President’s pronouncements will reflect the resilience of the Government of National Unity and its commitment to shaping a better future.

He said it was imperative that government responds to SA's socio-economic challenges such as poverty and unemployment, and meets the needs of the people.

“The best way of doing so is to put all our differences aside and work together with the private sector and civil society," he said. “We are a government that is committed to fundamentally altering the circumstances under which our people live. Our commitment is to ensure that we reduce the cost of living and create opportunities for businesses to thrive."

Empowering inclusive growth

At last year's Sona, Ramaphosa emphasised the importance of economic inclusivity, aiming to empower historically disadvantaged communities. Key initiatives he brought up included enhancing black ownership in critical industries, supporting small businesses, and providing funding to entrepreneurs.

The government, Ramaphosa said, was also focused on promoting worker ownership in companies, seeking to reduce socio-economic disparities and create a more equitable economy.

In addition to these issues of economic growth and job creation, it is anticipated Ramaphosa will address such matters as SA's electricity tariff-hike debacle due to rising costs of energy generation and infrastructure maintenance; and whether he will follow up on progress on SA's Just Energy Transition initiative, which was presented as central to South Africa’s economic renewal in last year's Sona.

He set the intenion of investing in renewable energy, modernising infrastructure, and implementing regulatory reforms, as well as stabilising the country’s energy supply.

Tariffs threaten trade

Finally, key to the success of Ramaphosa's address will be whether he addresses how Trump's upcoming tariff hikes could impact South Africa and other African nations, particularly in terms of the African Growth and Opportunity Act (AGOA), which provides duty-free access to the US market for eligible African countries, boosting exports like textiles, apparel, and agricultural products.

Increased tariffs could make these goods more expensive, reducing their competitiveness in the US market, and would undermine trade relations and economic growth, especially for South Africa, which is a key AGOA beneficiary.

At last year's Sona, Ramaphosa reiterated South Africa’s commitment to regional integration and intra-African trade, underscoring the opportunities provided by the African Continental Free Trade Area.

Let's hope he continues this approach with the aim of boosting economic ties within the continent and enhancing South Africa’s position as a key player in Africa’s economic development.

Meanwhile, Morolong said the two-day Cabinet Lekgotla, convened by Ramaphosa this week with leaders from all government levels, reviewed government's progress in addressing such concerns, assessed challenges, and set the agenda for the seventh administration, which will inform Sona's discussions and shape the government's action plan for the year.

To this end, Morolong commended the progress made by Eskom in stabilising the energy grid, with the power utility having recently marked over 300 days of no load shedding.

“We hope that these milestones will go a long way in the growth of our economy, and make sure that the economy creates much-needed jobs," he said.