South Africa remains in suspense: Will Ramaphosa’s June 20, 2019, SONA help boost the state of the economy?

SOUTH AFRICA - Report 19 Jun 2019 by Iraj Abedian

On Thursday, June 20, 2019, President Ramaphosa will deliver the first State of the Nation Address (SONA) of the 6th Parliament, themed “Let's grow South Africa together as we celebrate 25 years of freedom”. This will be his third SONA. The first and second SONAs were mainly centered around strong action against corruption by the governing party, finding ways and means of reviving the economy, restoring the country’s global competitiveness, sustaining focus on raising investment levels, as well as generating employment in the country. Despite much publicity and efforts, he has little to show with regard to these objectives.

Exactly four months have elapsed since the last time the President delivered the previous SONA, and just over a month has passed since the general elections of May 8, 2019. Meanwhile, GDP has registered -3.2% q/q saa (following 1.4% q/q in Q4 2018), with only three of the ten industries having contributed positively to the quarterly results. Indeed, the economy remains subdued, with electricity supply woes having placed immense pressure on the mostly energy-driven industries such as the mining and manufacturing sectors since the beginning of the year. Not only have the macro-economic trends gone south, but also the state of South Africa’s state-owned entities (SOEs) has deteriorated.

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