While all the SONA drama was happening last night #ZuptaMustFall, I went out for sushi and paid it no attention at all.

Then this morning, I read the transcript (see here). And initially, I was a bit confused:

The year 2016 also marks the centenary of the battle of Deville Woods in France, which took place during the First World War.

Scores of Black soldiers fought in the war but were treated badly due to the colour of their skin.

A memorial that will restore their dignity and humanity is scheduled to be unveiled in July this year in France.

I thought that perhaps I had the wrong speech, because I wasn’t quite sure why French history lessons formed part of the State of the [South African] Nation address.

But then there was this:

When the economy grows fast it delivers jobs. Workers earn wages and businesses make profits.

The tax base expands and allows government to increase the social wage and provide education, health, social grants, housing and free basic services – faster and in a more sustainable manner.

Our economy has been facing difficulties since the financial crisis in 2008. We embarked on an aggressive infrastructure development programme to stimulate growth.

Our reality right now is that global growth still remains muted. Financial markets have become volatile. Currencies of emerging markets have become weak and they fluctuate widely.

The prices of gold, platinum, coal and other minerals that we sell to the rest of the world have dropped significantly and continue to be low.

The economies of two of our partners in BRICS: Brazil and Russia – are expected to contract this year. The third, China, will not register the kind of robust growth that it is known for.

Because our economy is relatively small and open, it is affected by all of these developments.

Our economy is also affected by domestic factors such as the electricity constraints and industrial relations which are sometimes unstable.

The IMF and the World Bank predict that the South African economy will grow by less than one per cent this year. The lower economic growth outcomes and outlook suggest that revenue collection will be lower than previously expected.

Importantly, our country seems to be at risk of losing its investment grade status from ratings agencies. If that happens, it will become more expensive for us to borrow money from abroad to finance our programmes of building a better life for all especially the poor.

I mean, that’s not only an accurate assessment of the economy – it’s also remarkably succinct.

Other pleasant surprises:

We must take advantage of the exchange rate as well as the recent changes of visa regulations, to boost inbound tourism.

And (close to my heart):

We have heard concerns from companies about delays in obtaining visas for skilled personnel from abroad. While we prefer that employers prioritise local workers, our migration policy must also make it possible to import scarce skills.

The draft migration policy will be presented to Cabinet during the course of 2016.


Overseas trips will be curtailed and those requesting permission will have to motivate strongly and prove the benefit to the country.

The sizes of delegations will be greatly reduced and standardised.

Further restrictions on conferences, catering, entertainment and social functions will be instituted.

The budget vote dinners for stakeholders hosted by government departments in Parliament, after the delivery of budget speeches will no longer take place.

This (although I can’t really see it happening):

A big expenditure item, that we would like to persuade Parliament to consider, is the maintenance of two capitals, Pretoria as the administrative one and Cape Town as the legislative capital.


To achieve our objectives of creating jobs, reducing inequality and pushing back the frontiers of poverty we need faster growth.

In the National Development Plan, we set our aspirational target growth of five per cent per year, which we had hoped to achieve by 2019.

Given the economic conditions I have painted earlier on, it is clear that we will not achieve that growth target at the time we had hoped to achieve it.

The tough global and domestic conditions should propel us to redouble our efforts, working together as all sectors. In this regard, it is important to act decisively to remove domestic constraints to growth.

We cannot change the global economic conditions, but we can do a lot to change the local conditions.

I mean, it’s true that most people were rather hoping that:

  1. President Zuma would mention the Constitutional Court proceedings around Nkandla;
  2. President Zuma would address his relationship with Dudu Myeni;
  3. President Zuma would bad mouth the Guptas;
  4. President Zuma would announce a set of SARS lifestyle audits for all government officials and State-Owned-Enterprise management in order to combat the giant corruption elephant in the room;
  5. President Zuma would explain for the Nene-whathisname-Gordhan debacle, as well as why Mr Nene isn’t working for the World Bank yet; and
  6. President Zuma would submit his resignation.

But I’m surprised that people were surprised that none of those things happened. Because, come now.

And on the plus side, there was no mention of long-discredited economic theories like “the amount of labour defines the value of a good or service”. Instead, those speechwriters delivered a fair assessment of where things stand (or, at least, as close as they could get without causing political offence).

I guess what I’m saying is: it could have been so much worse. And even if it comes to nothing, well, it still really could have been so much worse.

Closing thought (which was actually my first thought): "New glasses! Snazzy. But full frames are back in this season. Fyi."
Closing thought (which was actually my first thought): “New glasses! Snazzy. But full frames are back in this season. Fyi.”

And on that bombshell…

Rolling Alpha posts about finance, economics, and sometimes stuff that is only quite loosely related. Follow me on Twitter @RollingAlpha, or like my page on Facebook at www.facebook.com/rollingalpha. Or both.