SONA 2021 – Another South African Fairy Tale

On 11 February 2021 President Cyril Ramaphosa delivered his fifth State of the Nation Address, the second during the Coronavirus Pandemic. The expectations were high, the delivery – in front of mainly empty seats – optimistic, determined and dotted with manuelesque metaphors. But that was the delivery only as the content did not follow this lead, to the contrary, it failed to address the major issues and played out in yet another South African fairy tale.

For once and probably due to the absence of any EFF delegates this SONA started spot on time and Ramaphosa led the audience from the biological necessities of the survival and prosperity of fynbos through fire and the rain of democracy as a cleanser of previous exclusion of people in the country’s opinion-forming process right back to 300 years of oppression. But then came crunch time, the facts are not negotiable, but their interpretation and future developments are, apparently.

Here are my commented bullet points:

COVID VACCINES

Enough has been written by yours truly about the status quo of vaccines and vaccination in South Africa (“Lies, Failure & Vaccines“), but that is material that no politician wants to publish. So in good old tradition, wool has been pulled over the eyes and ears of the audience once again and a combined procurement path across Johnson & Johnson (9 million) via Pfizer/BioNTech (20 million) right to COVAX (12 million) and the African Union Task Team and ending with AstraZeneca supposed to calm the public. Do the math: 56 million people (besides foreign residents) need two shots each, bringing the total number of required vaccine doses close to 120 million (as we can be sure that some cool chains will break and vaccines will go to waste or will be misappropriated.) What will 40 million, less than a third, split over the next 6 months achieve? And that if the procurement numbers were true, but fact is that none of the above sources or quantities will come into play. South Africa will NOT see any major vaccination for months, except maybe 80 000 so far unapproved J&J doses with a 57% efficacy against 501Y.V2. Wow! We are so protected now! Let’s dance the Jerusalema

UIF & SARB LOAN SUPPORT

What looked like an achievement to have paid out R 57bn in UIF TERS and other assistance and granted loans of R 8bn under the SARB-backed Loan Scheme is in fact sad as various polls (like the weekly one by NEASA) show that not even half of all legitimate claims have been settled. We know why: embezzled funds, incompetent administration and a lack of fiscal supervision combined with ancient IT structure. On top of it banks like SasFin Bank and Mercantile Bank, who were nominated to be SARB-backed lenders but used any reason possible to refuse those loans based on lack of information and intellectual capacity to actually understand in which light those loans were supposed to be approved.

A bit of good news might be seen in the promise that UIF TERS has been extended to Mid-March, but for selected industries only. Those industries who do not have heavyweights lobbying or operate in respect or for the benefit of foreigners or foreign business interests will not be benefitting, nepotism and xenophobia still rule the corridors of parliament.

INFRASTRUCTURE PROGRAM

The old infrastructure programmes pre-COVID have apparently been reactivated to stimulate the economy to the tune of (unbudgeted) R 340bn and focus mainly on power generation, manufacturing and selected infrastructures. Sounds prima facie good, but hearing in which context, it turned the fresh milk sour: the renewed focus lies on local suppliers, locally manufactured components and with full throttle (accelerated) the implementation of B-BBEE. It is exactly those factors that will make any investor shy away and will not lead to a reasonable result. The two White Elephants Medupi and Kusile are silent witnesses that nobody wants to see or listen to.

Among those projects Ramaphosa surprised everybody with the update on the Smart City announced in SONA 2020 to be the future home of 300 000 – 500 000 people. A year ago without a definite location, no name and only just launched as a vision with first drawings. All of a sudden this first new city in South Africa since the end of apartheid has a name, a location and a (conservative) price tag of half a trillion (!) Rand as well as being hailed by Ramaphosa to become reality. Really? With what budget? How did it progress unnoticed during lockdown? Ramaphosa further confirmed that “ … Lanseria smart city will also self-fund the bulk sewerage, electricity, water, digital infrastructure and roads that will be the foundation of the new city, while driving cost-effective solutions and meaningful skills transfer”, all matter-of-factly while this has NEVER worked in any city of South Africa. Who is he kidding?

FOREIGN DIRECT INVESTMENTS (FDI)

The target was high when announced in DAVOS a few years back, to raise R 1.2 trillion in FDI. Allegedly R 773bn of that have been raised already, including those first botched and partly (!) revived investments by Ford, Toyota, Nissan or Mercedes Benz. Ramaphosa presented those investments as a success, some of the decisions reaching as far back as 2016 when GM withdraw its manufacturing from South Africa. No word about those investments that have already been withdrawn from South Africa as uninterrupted three-shift-manufacturing in Kigali in Rwanda is the flavour of the day, not watching the toyi-toyiing workers at the gates in Uitenhage.

POWER GENERATION

Ramaphosa portrayed ESKOM like it was a happily recovered healthy patient when reporting the successful split into three divisions: Generation, Transmission and Distribution. Again a plan that he announced as far back as SONA 2019 and now it is reality? ESKOM healthy? Well, loadshedding stage three last week and still unfinished, over-the-budget coal plants Medupi and Kusile invite to beg to differ beside the point that in December last year (six weeks ago) the first separation of the Transmission Division was still in deep debates and not without doubts. Another set of pants on fire?

Beside ESKOM and Coal-fired Power Plants, Ramaphosa addressed also the revival of the REIPP Programme for Renewable Energy Power Plants and that we will see Bidding Rounds 5 and 6. With all due respect, but nobody wants to tender in thses rounds anymore at cost exceeding R 50m a pop, ESKOM being unable to commit to any Power Purchase Agreement and government delaying signatures with the winners. Almost all of the companies previously involved in building renewable Energy Power Plants from Italy, Spain, Germany and France have left South Africa, upset, mostly still owed money by ESKOM or SA Government and totally fed up with having to sacrifice their skills levels and project implementation by being forced to team up with Black Empowerment Start-Ups. Wake up, smell the roses and search for your torch …. another epic fail in a uniquely botched bidding environment is to hit the stage. Only one thing is sure, loadshedding stays in light of a permanent 4 000 – 6 000 MW power shortfall and the planned 11 800 MW new renewable power plants will suffer the same fate like Medupi and Kusile.

VISA & IMMIGRATION REFORM

What a big surprise that President Cyril Ramaphosa picked up on the total state of paralysis of the Department of Home Affairs caused by the laziest Minister ever, Aaron Motsoaledi. Since his appointment basically every Home Affairs service went pair-shape: In combination with illegal verbal instructions to the embassies to change visa requirements without law changes caused 90% of skilled immigrants and more than half of all foreign companies interested in investing in South Africa to stay away. The High Court had to get involved to declare the treatment and extradition of Asylum Seekers and refugees unconstitutional, but still to date not a single Refugee Officer has returned to work thanks to Motsoaledi defying even the highest court. But not enough, if you get married and need an unabridged marriage certificate or unabridged birth certificate for the new junior that arrived in lockdown, or if you need anything else from DHA: give up! Motsoaledi conveniently announced on 11 January 2021 the suspension of several services rendered by the Department of Home Affairs due to increased Death Certificates being issued …. the situation has turned almost 180 degrees, but not the “Department of Staying Home Affairs” as it is more comfortable sitting at home and watching telly than attending to the needs of the population.

Until now? Is Ramaphosa on the heels of Dr. A Lazy? Maybe, as he announced that the new Shortage Occupation List for Critical Skills Visa is being finalised (I am scared!), the existing visa regime to be streamlined (I am even more scared!) and the 10-year Business Visa now to be made accessible to more countries than China and India (I believe that when I see it!). The eVISA is supposed to come into effect for nationals of 10 different countries (wow, never mind the other 190 countries).

OTHER MATTERS

Beside the “news” on the above, President Ramaphosa also touched on the following issues:

SOE reforms: State-owned enterprises are supposed to undergo reforms and accountability and responsibility as well as capability are supposed the new criteria for Senior Execs. Shocker! Totally new concept!

Land Redistribution: 5 500 Farms have successfully been redistributed. A success as per Ramaphosa, an epic failure when adding how many percent of the previously active farming space is left; almost nothing as those who received the farms mostly plundered its assets and let it lie until unproductive. Moving on …

“Days of messing up Local Government are over”: The laughter after this comment still echoes through the corridors of SALGA (South African Local Government Association). Nothing will change, be assured, as it is in nobody’s interest at this government level to leave a cushy job doing nothing and lacking any skill or experience for the job except for collecting pay-cheques and filing for off-days.

Anti-corruption Advisory Council: I think we have now finally established Advisory Council No. 100. When announcing this council with a focus on getting rid of corruption in government, the criminal justice system and on all levels of public procurement only very few parliamentarians applauded, the rest looked stern, a unique confirmation and identification who is currently benefitting from all forms of corruption in government. Maybe the new Advisory Council can use footage of SONA 2021 to identify those who did not applaud and start their investigations there…. Pity that the biggest culprits did not attend and were hiding on the other side of the Zoom Channel.

IN SUMMARY SONA 2021 was designed to appease public and opposition and to create a false feeling of hope for the near future. It is not a privilege to dream, but there are places and times to do so, it does not help to misinform the public now in these tough times.

Tito Mboweni later this month will strip the SONA of most of the above camouflage when presenting real budgets and we will learn how much went to COVAX or the Vaccine Manufacturers, we will see how much money went to bankrupt SOEs including ESKOM and SAA or were further wasted on Medupi and Kusile. We will see how many billions of Rand were wasted in shady PPE deals by relatives of the NEC members or stolen from the UIF TERS and SME COVID Support Funds. We will see how many billions of Rand in FDI were really received and we will also finally learn the reality that we are not the FED in the US, which can print money, our budgets are limited. So limited that there is surely not half a Trillion Rand lying around for another white elephant, this time in Lanseria posing as future Smart City, and surely not for projects far less important than protecting the health and lives of our peoples.

We need to see heads rolling in front of the Zondo Commission and in anti-corruption trials against the leadership of this country. We need to establish again trust in their mandates and see them leading by example. We need to see past-sell-by-date politicians forcing ancient believes down the people’s throats such as Bheki Cele and Dlamini-Zuma axed from their positions and without political future. And finally:

We need to see a President and a Minister of Finance presenting to us SONA and BUDGET without the necessity of hiding the truth and to appease us with any more fairy tales.

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