President Cyril Ramaphosa delivered his state of the nation address on Thursday night in a tense and frustrated atmosphere after repeated disruptions by the EFF delayed proceedings for more than 90 minutes.
It was only after the EFF left the chamber that Ramaphosa could get on with the speech.
Ramaphosa acknowledged the difficult economic environment and the mounting disillusionment of the public, promising that the government was charged with solving critical problems, such as the unreliable energy supply and the stagnant economy.
SA should not succumb to "the many difficult and protracted problems that confront us", but rather confront them to place the economy "on a path of inclusive growth", he said.
There was little new in the speech, which was mainly a reiteration of measures and commitments already made on Eskom as well as economic reforms contained in a policy paper published by finance minister Tito Mboweni in 2019. Ramaphosa did, however, make definite commitments that unblocking regulatory obstacles to facilitate the production of energy from outside of Eskom would be taken urgently, most significantly of renewable energy.
These measures will include a ministerial determination under section 34 of the Electricity Regulation Act that would make possible "the development of additional grid capacity from renewable energy, natural gas, hydropower, battery storage
and coal".
The government would also open a new bid window of the renewable energy independent power-producer programme, and would work with producers to accelerate the completion of projects still under construction from the previous window.
Existing producers able to provide more energy than the contracted amounts for which they are paid would also have their contracts renegotiated to enable this.
Mineral resources & energy minister Gwede Mantashe had said previously that a new bid window would be opened only when existing projects were completed.
Business has repeatedly urged Mantashe since his appointment last May to take the regulatory steps, for which he has sole executive authority.
Municipalities in good financial standing would be able to procure their own power from independent power producers, Ramaphosa said.
The government and its social partners had engaged intensely in recent weeks to find ways to mobilise resources to reduce Eskom’s R450bn debt and inject fresh capital where needed.
This would be done "in a manner that did not put workers’ pensions at risk or compromise the integrity of the financial system".
Ramaphosa’s commitment follows two weeks of talks with business and labour in which Cosatu proposed using R250bn of pension money managed by the Public Investment Corporation to pay down Eskom debt.
The proposal generated enormous anxiety in the investor community as well as among workers.
The biggest surprise was a decision to establish a sovereign wealth fund, which Ramaphosa said would "serve as a means to preserve and grow the national endowment of our nation, giving practical meaning to the injunction that people shall share in the country’s wealth".
A sovereign wealth fund is ordinarily used by countries to save income derived from natural endowments for future generations.
Ramaphosa did not elaborate on where the income for the fund would be drawn from.
He repeated commitments made in the ANC election manifesto and conference solutions to establish a state bank and to stabilise, rationalise and repurpose state-owned enterprises.
Turning to public finances, Ramaphosa said that SA’s debt was "heading to unsustainable levels" and government spending would have to be reduced and restructured to alter its composition.
These announcements would be made in the budget speech at the end of February.
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