SONA recognises grave socio-economic challenges

The wide-ranging SONA delivered by President Cyril Ramaphosa to Parliament last night recognized the grave socio-economic challenges currently faced by SA, especially its low growth and high unemployment., says Professor Raymond Parsons, economist at North West University Business School.
Professor Raymond Parsons

The positive impact of the policy framework outlined in the SONA will depend on successful implementation and close collaboration with the private sector.

The wide-ranging SONA delivered by President Cyril Ramaphosa to Parliament last night recognized the grave socio-economic challenges currently faced by SA, especially its low growth and high unemployment., says Professor Raymond Parsons, economist at North West University Business School.

The SONA outlined the broad framework from government to address these challenges, coupled to certain specific decisions, he adds.

“The emphasis in the SONA on inclusive growth and the need to urgently remove the obstacles to structural economic reforms is welcome. The SONA also acknowledged the importance of collaboration with the private sector to promote job-rich growth.

“Positive aspects in the SONA included the steps announced on the energy front and measures to encourage youth employment. The decision to allow energy generation outside Eskom, especially for well-run municipalities, is an important step in the right direction. It remains imperative to lessen the risk that Eskom continues to pose to SA’s economic performance. Other SONA announcements require more detail and need more clarification.”

Professor Parons states that the extent to which the SONA can reduce policy uncertainty and boost investor confidence will depend on whether the sense of immediacy created by the SONA will be translated into positive action and tangible outcomes.

“And as important as the SONA is in setting the overall economic and political direction, references in the SONA to issues such as the creation of a Sovereign Wealth Fund, the financing of Eskom, disciplining the public sector wage bill, and establishing a State Bank must await further exposition in the Budget on February 26.

“The fiscal arithmetic in the Budget will also show whether SA is indeed stabilizing its public finances, reducing bailouts to dysfunctional state-owned enterprises, and winding down its overall debt. It is the 2020-21 Budget that Moody’s will assess in deciding whether to downgrade SA’s investment rating, thus triggering the likelihood of universal junk status for SA.”



Latest


16 Feb 2021
Transition management services partnership announced

Standard Bank has signed a memorandum of understanding (MoU) with Chicago-headquartered financial services company Northern Trust, to partner on the…

Transition management services partnership announced

Standard Bank has signed a memorandum of understanding (MoU) with Chicago-headquartered financial services company Northern Trust, to partner on the delivery of transition management services across Southern Africa. Under the partnership, Standard Bank’s clients will gain access to Northern Trust’s full suite of transition management services. Transition Management is a…

16 Feb 2021
Tax free wealth creation with property funds

By Liliane Barnard, CEO and Portfolio Manager at Metope Investment Managers, and Aimee Glisson, Director: Operations, Performance & Risk at…

Tax free wealth creation with property funds

By Liliane Barnard, CEO and Portfolio Manager at Metope Investment Managers, and Aimee Glisson, Director: Operations, Performance & Risk at Metope Investment Managers The tax year, along with the deadline for an investor’s maximum R36 000 annual tax-free savings account contribution, comes to an end on the 28 February 2021. Investors…

16 Feb 2021
Why multi-manager investing is popular

Multi-management has been around for over two decades. This investment management approach is popular among many investors because it promises…

Why multi-manager investing is popular

Multi-management has been around for over two decades. This investment management approach is popular among many investors because it promises to deliver smoother, more consistent investment returns, despite cyclical turbulence of financial markets. Given last year’s drastic swings in financial markets and continued uncertainty on how the Covid pandemic will…

16 Feb 2021
Momentum Health Solutions unpacks COVID-19 vaccine roll-out plan

Momentum Health Solutions announced its COVID-19 vaccine roll-out strategy and how it intends to support both its members, as well…

Momentum Health Solutions unpacks COVID-19 vaccine roll-out plan

Momentum Health Solutions announced its COVID-19 vaccine roll-out strategy and how it intends to support both its members, as well as the uncovered population, in being vaccinated. As the COVID-19 virus continues to spread, a third wave is imminent, should the vaccination rollout not commence soon. Speaking at a recent…


Top stories


10 Sep 2020
How too much choice is draining your brain

By: Paul Nixon, head of technical marketing and behavioural finance at Momentum Investments From the words of Francis Scott Key…

How too much choice is draining your brain

By: Paul Nixon, head of technical marketing and behavioural finance at Momentum Investments From the words of Francis Scott Key that dubbed America “The land of the free”, which stuck, to the unforgettable Mel Gibson monologue where an army of painted Scots were willing to trade their lives for the…

13 Apr 2020
Investors should keep a reasonable investment allocation outside of SA

MoneyMarketing asked Roland Gräbe, the head of Tailored Fund Portfolios at Old Mutual Wealth, about offshore investments in the COVID-19…

Investors should keep a reasonable investment allocation outside of SA

MoneyMarketing asked Roland Gräbe, the head of Tailored Fund Portfolios at Old Mutual Wealth, about offshore investments in the COVID-19 environment and what form a global market recovery will take.

13 Apr 2020
SA’s Proposed Covid-19 Disaster Management Tax Relief

The National Treasury recently issued the draft Disaster Management Tax Relief Bill (Bill) for public comment by 15 April. The…

SA’s Proposed Covid-19 Disaster Management Tax Relief

The National Treasury recently issued the draft Disaster Management Tax Relief Bill (Bill) for public comment by 15 April. The draft Bill, together with its explanatory memorandum, provides clarity with regards the tax relief measures President Cyril Ramaphosa announced on 23 March.

10 Apr 2020
When the going gets tough, farmers are on familiar territory

South African farmers are old hands at adapting to uncertain and daunting circumstances, and our local agricultural industry has proved…

When the going gets tough, farmers are on familiar territory

South African farmers are old hands at adapting to uncertain and daunting circumstances, and our local agricultural industry has proved to be most enterprising in acclimatising to challenges as they arise.


Visit the official COVID-19 government website to stay informed: sacoronavirus.co.za