Critics have slammed President Cyril Ramaphosa's ambitious promises in State of the Nation Address, as lacking a “clear path” and not including important information as to where funds are going to come from in a struggling economy.
In his SONA, President Ramaphosa unveiled an array of proposals, including massive financial commitments for infrastructure, social development, and tech start-ups.
Economist Dawie Roodt referred to the president as “someone living in cloud cuckoo land” and said South Africa's economy is in deep trouble, with the country in a worse position today than it was 15 years ago.
Roodt highlights the reality of high unemployment, rising poverty, and an economic outlook that is bleak at best.
He believes that the President's optimistic portrayal of South Africa's achievements is disconnected from the true state of the economy, calling the promised 3% GDP growth a "pipe dream."
"The economy won't grow at 1.5%; 3% is a pipe dream. We've discussed SOEs for years, yet their decline, especially Eskom and Transnet, continues."
“The Post Office is unravelling. This is not a reform or improvement of the SOEs. The Africa Free Trade Agreement has been in place for some time. We have not made any progress on that. This is just lip service to something that could be great.”
Roodt said while the President's sweeping promises, including digital ID systems, new mining rights, and ambitious infrastructural projects, sound appealing, they are at odds with South Africa’s financial constraints.
“We've got so many funds for all sorts of start-ups, when most of these are just not working. I suggest we don't start things, let’s make sure the stuff we actually do actually does work.”
Roodt also pointed out that Ramaphosa’s commitment to social relief, actually portrays a sad reality.
“This basically means that the president admits that we've got massive levels of unemployment and poverty and many, many millions of people, in fact 28 million people receive social assistance from the State and rely on it to survive.”
Economist Ulricht Joubert also expressed concerns about the challenges surrounding funding and expertise, noting the poor performance of the economy.
“For all of us, we want to see the execution of all these very, very, good and necessary projects that the President has spoken about and so we wait to see, but we've got the two big problems, funding and expertise.
“Once again we are left asking, where are all these funds coming from? And then the second big problem is, where is the expertise coming from? Where are the people with the knowledge?”
Build One SA (BOSA) has criticized President Cyril Ramaphosa’s State of the Nation Address (SONA) for offering over R1.4 trillion in “lofty promises”, with no clear plan for how the ambitious goals will be funded or realized.
This amounts to over R1.4 trillion for various infrastructure (R900 billion) and transformation projects (R500 billion) over the next five years.
BOSA echoed Roodt and Joubert’s concerns, urging the government to acknowledge the true state of the economy and implement policies that can deliver real, sustainable growth.
Its spokesperson Roger Solomons explained: “The harsh reality is that our economy is contracting, corruption remains rampant without consequence, and critical services like education, water, and energy continue to deteriorate.
"The President's target of 3% economic growth is insufficient; South Africa needs at least 5% for job creation and real transformation. The SONA lacks a credible path to even reach 3%."
“The economy is currently contracting at -0.3% per annum, with investment confidence at an all-time low. The President did not present any tangible policies to boost investment or job creation."
Solomons added that without decisive structural reforms—such as reducing red tape for businesses, cutting excessive government spending, and tackling crime—the target set by Ramaphosa is nothing more than a “wishful figure”.
“The President made large financial commitments, from infrastructure projects to a transformation fund, totalling at least R1.4 trillion over the medium term.
“But the reality is that the Minister of Finance will struggle to find these funds. Our national debt is spiralling out of control, and government borrowing costs continue to rise.
“Without a robust debt management strategy, public finances will remain unstable, pushing the country deeper into an economic crisis.”
Personal Finance & Economic Expert - Jurgen Eckmann, Wealth Manager at Consult by Momentum, also emphasised that a clear path to delivering promises was needed: “Hope for economic recovery must be matched by concrete action and tangible results. Until we see meaningful improvements in employment, GDP growth, and fiscal stability, cautious financial planning is necessary to navigate the uncertain road ahead.”
Eckmann said while the SONA set ambitious goals, real progress remains unclear.
“Youth unemployment remains stubbornly high, despite job creation initiatives, and seems to have stagnated. In the first quarter of 2024, the unemployment rate among individuals aged 15 to 24 stood at 60.8%, with a slight decrease to 60.2% in the third quarter.
“GDP growth is expected to struggle to break 1% in 2024, yet a 3% target for this year has been set. The economy contracted by 0.3% in the third quarter of 2024, following a 0.4% growth in the second quarter. This does not look promising for the President’s target.”