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South Africa: President Zuma delivers State of Nation address – to focus on economy
South African President Jacob Zuma. PHOTO/File
South African President Jacob Zuma will be delivering the first State of the Nation address of his second term on Tuesday, under pressure to outline plans for reviving growth and creating much-needed jobs in Africa’s most advanced economy.
A double blow from ratings agencies last week underlined the precarious state of the economy, which contracted in the first quarter. South Africans will also be closely watching Zuma himself after he was hospitalized this month with fatigue.
The 72-year-old was quickly discharged after “routine tests”, his office said a week ago. However, he handed over the reins to his deputy Cyril Ramaphosa for 5 days to give himself time to recover from the rigors of preparing for the May 7 election.
Zuma’s African National Congress (ANC) won a 62 percent majority in the vote, the fifth since the end of apartheid in 1994, but the ruling party has had little to cheer about since the result.
Labor unrest in the mining industry has negatively impacted the the economy towards recession and the impact on broader growth and government finances prompted Fitch to put South Africa on a negative outlook and Standard & Poor’s to cut its credit rating on Friday.
Hitherto, Zuma had relied almost exclusively on a National Development Plan (NDP) drawn up in his first term as his broad blue-print for promoting long-term growth.
Analysts said the president also needs to address the deep mistrust that exists between the government, unions and the private sector if the development plan – which requires the cooperation of all three entities – is to have any chance of success.
S & P’s downgrade means South Africa could even lose its coveted investment grade credit rating if growth fails to pick up. The outlook continues to remain stable for now, indicating it is not looking at cutting its rating again soon but investors will want reassurance that the government is committed to steering the economy back to health.
The South African economy has been further strained by a cold snap at the start of the southern hemisphere winter and outages at some power generation units, which led to temporary rolling blackouts to prevent the national grid from collapsing.
Zuma’s address to parliament in Cape Town is due to start at 4:00 pm local time (10:00 am EDT).
Source: Reuters