17/02/2018 08:50 SAST | Updated 17/02/2018 08:50 SAST

Ramaphosa: Here’s Where The Economy’s Going

9 things you need to know about where we’re headed

President Cyril Ramaphosa delivers his maiden State of the Nation address at Parliament in Cape Town.
POOL New / Reuters
President Cyril Ramaphosa delivers his maiden State of the Nation address at Parliament in Cape Town.

President Cyril Ramaphosa's first state of the nation had a very firm economic focus. It provided direction on growth and what the measures will be to stimulate jobs and growth.

Here's what you need to know.

1. We are out of the era of ideology

Ramaphosa set out a mixed-economy model of a strong and redistributive state with measures to support a market economy. This is a shift from the era of former Jacob Zuma who ran a state-led economic model.

2. Youth unemployment is at the centre of economic policy

This is an excellent policy plan for Ramaphosa to have chosen but also a difficult one. The economist Tashmia Ismail of Investec says there are six million young people out of jobs.

Ramaphosa said the tax incentive to employ youth would be continued while a youth employment service that is being planned in the private sector will lift over a million unemployed young people into the economy.

3. Picking winners: Mining, tourism and manufacturing

Ramaphosa set out his vision for where economic growth will lie. This is in mining (which the president said is a sunrise not a sunset industry), tourism and manufacturing.

"To further stimulate manufacturing, we will forge ahead with the localisation programme, through which products like textile, clothing, furniture, rail rolling stock and water meters are designated for local procurement."

4. A Davos for South Africa

Ramaphosa said "some financial institutions have identified South Africa as one of the hot emerging markets for 2018." He will convene an investment summit in the next three months to capitalise on the renewed interest in South Africa. This will be a version of the World Economic Forum at Davos which is used as a way to secure foreign investment.

5. A Jobs Summit

There will be a jobs summit in 2018. "The summit will look at what we need to do to ensure our economy grows and becomes more productive, that companies invest on a far greater scale, that workers are better equipped, and that our economic infrastructure is expanded.

6. Radical Economic Transformation

Ramaphosa defined the phrase which is at the centre of the ANC economic policy: "radical economic transformation requires that we fundamentally improve the position of black women and communities in the economy, ensuring that they are owners, managers, producers and financiers."

7. Transformation

Ramaphosa promised to improve preferential procurement (where black-owned companies get preferentially treated by the state), continue the black industrialist programme, deal decisively with companies that resist transformation and to invest in the development of township and rural economies.

8. Infrastructure

Growth through infrastructure was a key plank of former president Jacob Zuma's government. Ramaphosa has promised to streamline and speed up how infrastructure is delivered.

9. Mining charter

Ramaphosa has promised to personally ensure the stalled mining charter is negotiated and passed. The mining charter sets ownership and other targets for the mining industry.