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Higher Education, Science and Innovation Minister Dr Blade Nzimande made a direct link between the country’s plans to produce green hydrogen for export and domestic markets and the Economic Reconstruction and Recovery Plan (ERRP) when officially unveiling the Hydrogen Society Road Map (HSRM) on Thursday.

Nzimande said that he viewed the HSRM as one of the “leading instruments” for the economic recovery being pursued by government under the ERRP.

“As government we are determined to create an environment which encourages investment, the creation of employment and the skills needed for our economic growth and development.

“I therefore view the launch of the HSRM as amongst the critical and leading instruments towards our economic recovery,” he said, adding that initial research pointed to the possibility of creating 20 000 green-hydrogen-linked jobs by 2030.

The road map, which has been widely consulted, states explicitly that South Africa should leverage the emerging hydrogen opportunity as part of the ERRP, as well as to “rebrand” the country as a destination for sustainable investment.

This point was underlined at the launch by Trudi Makhaya, who is special economic adviser to President Cyril Ramaphosa.

She noted that Ramaphosa had used his recent State of the Nation Address to highlight the important role the HSRM could play in stimulating an economic recovery, through major new investments in green hydrogen.

“President Ramaphosa often asks: where will growth come from?”

“Well, I am convinced by the analysis presented in this report and the work I have witnessed over time, that the hydrogen economy will be an important source of economic growth and jobs for the economy,” Makhaya said.

The report emphasises the need to create an environment for the investments needed to develop an “inclusive, sustainable and competitive hydrogen economy by 2050”, but also stresses the importance of implementing small-scale “catalytic projects” in the short term.

15 GW OF ELECTROLYSER CAPACITY BY 2040

While the document sets only a modest target of 1 MW of green-hydrogen production capacity by 2024, it envisages a material upscaling thereafter, to more than 15 GW of electrolyser capacity by 2040.

It anticipates that much of this capacity will be located in the Northern Cape, including within a new special economic zone at Boegoebaai, near the border with Namibia, which also has big green hydrogen ambitions.

By 2030, the HSRM envisages yearly green-hydrogen production of at least 500 000 t.

The HSRM also outlines six high-level outcomes, including using hydrogen to:

support the decarbonisation of the transportation subsectors of heavy-duty trucking, shipping, aviation and rail;

facilitate the decarbonisation of energy-intensive industries such as iron and steel, chemicals, mining, refineries and cement;

create export markets for green hydrogen and derivative products such as green ammonia;

green and enhance both the electricity and building sectors;

develop a manufacturing sector capable of producing hydrogen products and production components; and

support the transition from grey to blue and green hydrogen in those sectors that already use hydrogen as a feedstock, including the country’s coal- and gas-to-liquids producers.

The transition from grey hydrogen would be further facilitated, the HSRM indicates, by the finalisation of a ‘Green Hydrogen Commercialisation Strategy’, the formulation of which was being overseen by the Department of Trade, Industry and Competition.

Also underlined in the report is the need for international partnerships, including with key export destinations, such as Europe, Japan, South Korea and China.

“However, we also need to ensure that our national interests are clearly articulated and protected,” the report states.

President Cyril Ramaphosa defended housing a unit to tackle excessive regulation in The Presidency on the basis that “red tape is not found only in one department and there is no single department that can tackle red tape on its own”.

In his response to the debate on the State of the Nation Address (SoNA), in which he announced the appointment of business personality Sipho Nkosi to lead The Presidency’s red tape team, Ramaphosa said that reducing red tape would have benefits for companies of all sizes and unleash investment and growth.

“Not only does red tape increase the costs of doing business, but it also constrains South Africans in their everyday lives and in many of their interactions with government.

“Whether it is a matter of getting a building permit, a driver’s licence, a title deed or a marriage certificate, all South Africans have to carry the cost of bureaucratic inefficiency and excessive regulation.”

The President’s focus on reducing unnecessary regulation met a mixed reception, with many in business welcoming the priority the issue was being given and others, including several opposition leaders, describing it as a motion of no confidence in the Cabinet Ministers responsible for small business development and trade and industry.

There has also been criticism that the appointment of a business leader to a position that is to be housed in The Presidency represented an attempt by Ramaphosa to build is office into a super Ministry, as well as to cover for the inefficiency or defiance of members of his Cabinet.

The leader of the official opposition John Steenhuisen even went as far as to table a ‘Motion of No Confidence’ in Ramaphosa’s entire Cabinet and promised the Democratic Alliance’s support for various Bills once “this House fires them for you”.

In response, Ramaphosa denied that The Presidency was either bloated or an attempt at building a “parallel State”.

“This is a Presidency at work to drive a coherent and effective programme of action across government,” he said, adding that he presided over a Cabinet of Ministers in whom he had the greatest confidence.

He also clarified and reinforced his SoNA argument that the private sector should play a central role in job creation.

This statement drew applause from the DA, which described it as Ramaphosa channelling DA policy, and venom from the Economic Freedom Fighters, which insisted that the State should lead the country’s job-creation efforts.

Ramaphosa said he did not accept that a choice had to be made between a developmental State that drives economic and social transformation, and a vibrant, expanding private sector that fuels growth and employment.

“We do not agree that, by recognising the role of business in creating employment, we diminish the central role of the State in coordinating, planning and guiding the development of the economy,” he said, while noting that three-quarters of all jobs in South Africa already resided in the private sector.

“This is what we mean when we talk about a mixed economy that draws on the resources, strengths and capabilities of both public and private sectors.”

Mineral Resources and Energy Minister Gwede Mantashe says South Africa has natural renewable-energy resources to “generate the much-needed energy to kickstart our economy and put South Africa on a just energy transition trajectory”.

In an address to the Solar Power Africa conference on Wednesday, the Minister departed from his characteristic defence of fossil fuels and nuclear to highlight the potency of South Africa’s solar resources.

“South Africa’s solar resource potential is amongst the highest in the world, with most areas in the country averaging 2 500 hours of sunshine per year, combined with high solar irradiation levels of between 4.5 and 6.5 kWh/m2 per day.”

He argued that the Integrated Resource Plan of 2019 (IRP 2019) had consolidated a significant role for renewables technologies, which had been underlined by the first two Ministerial determinations made under the IRP 2019, which cater for the procurement of 13 813 MW of wind and solar.

“This represents 44% of the total IRP 2019 target of 31 488 MW for new additional capacity that must be added by 2030.

“The IPP Office has procured 4 578 MW, or 33%, of the determined energy.”

The Minister noted that Bid Window 5 of the Renewable Energy Independent Power Producer Procurement Programme (REIPPPP) was currently at the preferred-bidder stage and that financial close was expected by the end of April this year.”

Twenty-five wind and solar preferred bidders were identified in October, involving projects with a combined capacity of 2 583 MW and a collective investment value of about R50-billion.

Mantashe said a further 9 213 MW is planned for procurement during 2022 and early 2023, but did not offer a breakdown by technology type, with Ministerial determinations also having been published for gas-to-power, coal and battery energy storage.

In a separate speech delivered as part of the debate on President Cyril Ramaphosa’s State of the Nation Address, Mantashe said a request for proposals for 2 600 MW of additional renewable energy would be released at the end of March, in the form of REIPPPP Bid Window 6.

“In April, there will be a request for proposals for 513 MW from battery storage.

“Thereafter, additional bid windows, including Bid Window 7, will follow at six-month intervals.”

He said that government’s IPP programmes had, to date, attracted investment to the value of R212.4-billion from national and international funders.

The National Energy Regulator of South Africa (Nersa) has initiated public consultations on Eskom’s latest regulatory clearing account (RCA) application, through which the utility is seeking to recover an additional R10.7-billion for the 2020/21 financial year – a period which coincided with South Africa’s most intensive Covid lockdowns.

Nersa has published a consultation paper and has requested stakeholders to submit written comments by March 7, after which it will host three days of virtual public hearings from March 9 to 11.

A decision will be made on April 28.

Eskom’s application is driven primarily by a large difference in the sales volumes achieve during the year and those assumed by Nersa in determining Eskom original allowable revenue for the financial year.

The Energy Regulator’s allowable revenue decision for 2020/21 was R221.8-billion for all customers, which translated to an average nominal tariff increase of 8.1% for standard tariff customers during the year, which was the second in the fourth multiyear price determination period.

The utility calculates the revenue variance to be R9.7-billion, after excluding R8.3-billion in Covid-related sales losses, which it estimates at 7.1 TWh for the period.

“Electricity sales during the period under review reflect a challenging macroeconomic environment as well as the impact of the pandemic,” Eskom says in its application, while stressing that both Covid- and load-shedding-related volumes had been removed from its revenue variance.

Load-shedding during the period is reflected in R1.2-billion being subtracted from the variance for the year.

Eskom is also claiming various cost variances for the period, including an operating expenditure variance of R6.1-billion, primary-energy-related revenue of R3-billion, including for diesel to operate the open-cycle gas turbines to limit load-shedding, and international purchases of R1.8-billion.

These claims are offset by over recoveries on depreciation of R6.6-billion, as well as R2.8-billion related to lower purchases from independent power producers and a return on assets of R296-million in favour of the customer.

The RCA amount also include R83-million relating to the phasing in of the nuclear decommissioning provision from an earlier RCA decision.

Eskom, which has launched several successful legal reviews of previous RCA decisions, also uses it submission to highlight delays in recouping amounts approve by Nersa or secured through court rulings.

“The average time for recovery has been over four years,” the utility asserts.

The RCA application is separate from Eskom’s pending allowable revenue application for 2022/23 that, if approved, could result in a 20.5% tariff hike on April 1.

The tariff determination could include a R3.4-billion amount approved following the 2019/20 RCA decision, approved in late 2021.

The Energy Regulator’s decision on the 2022/23 application is expected on February 25.

Mineral Resources and Energy Minister Gwede Mantashe confirmed on Tuesday that not all of the 11 Risk Mitigation Independent Power Producer Procurement Programme (RMIPPPP) preferred bidders would be in a position to conclude power purchase agreements (PPAs) at the end of March, the deadline for the projects to reach financial close.

During a Parliamentary debate on President Cyril Ramaphosa’s recent State of the Nation Address (SoNA), Mantashe said steps were being taken to address a current supply shortfall that the President estimated to be 4 000 MW, but which several commentators believe to be closer to 6 000 MW.

He said PPAs would be signed next month with RMIPPPP preferred bidders, which were selected as part of an emergency, albeit much delayed, procurement round for 2 000 MW.

The projects were selected in March last year and the initial financial close deadline of July was extended initially to the end of September, then to January this year and finally to the end of March.

“The challenge is that not all of the RMIPPPP preferred bidder projects may be in a position to conclude power purchase agreements due to outstanding processes on their side,” Mantashe told lawmakers.

His statement gels with the one made by Ramaphosa in his SoNA speech, in which the President announced that only 800 MW of the 2 000 MW in projects selected under the RMIPPPP were ready to proceed.

Given that three Karpowership projects comprised about 1 200 MW of the RMIPPPP allocation, there was immediate speculation that the projects, which face legal, environmental and gas-pricing uncertainty, were among those that were not ready to proceed.

Mantashe also announced that 2 600 MW of renewable energy being procured under Bid Window 5 of the Renewable Energy Independent Power Producer Procurement Programme would enter into PPAs in April and announced that Bid Window 6 for another 2 600 MW of wind and solar would be launched at the end of March.

“Thereafter, additional bid windows, including Bid Window 7, will follow at six-month intervals.”

The Minister also announced that a request for proposals for 513 MW of battery storage would be released in April.

No specific timeframes were provided for the launch of procurement processes for gas-to-power and so-called clean-coal, as catered for in the Integrated Resource Plan of 2019, but Mantashe offered his now customary defence of both fossil fuels, as well as that of nuclear.

“It is comforting to see that there is now growing global consensus on the role of gas and nuclear in the energy transition.

“The European Union has labelled these technologies as part of the green transition,” he asserted, referring to a controversial February decision of the European Commission to allow, under specific conditions, some gas and nuclear activities to be considered sustainable.

Mantashe also announced that government was addressing suspensive conditions set by the National Energy Regulatory of South Africa “before we can issue a request for proposal for 2 500 MW of nuclear energy”.

The Department of Mineral Resources and Energy recently published a terms of reference document for a service provider to develop a framework for the procurement of new nuclear capacity. The tender will close on February 25.

REFINERY SHUTS SLAMMED

The Minister also used his speech to slam as greedy and arrogant the decision of certain international energy companies to shut their local oil refineries in favour of imports.

On February 10, bp Southern Africa and Shell Downstream South Africa announced that they would pause refinery operations at Sapref by no later than the end of March 2022.

“This will be for an indefinite period but with a re-start possible in the future, including in the event of any future sale,” the companies said in a statement.

In April last year, Engen that it would shut the Engen Refinery and convert the site into an import terminal and product storage facility by the end of 2023.

Mantashe said the closures would “cau...

For South Africa’s beleaguered consumers, there has rarely been a better time to get into the new-car market in the past decade, says information and insights group TransUnion.

The country’s newest Vehicle Price Index (VPI) – which effectively measures the inflation rate for new vehicles – maintained its freefall of the past 12 months in the final quarter of 2021, while used cars continued to become relatively more expensive in the face of changing consumer demand and supply.

The latest TransUnion South Africa VPI for new vehicles moved from 9.6% in the last quarter of 2020, to 2% in the final quarter of 2021, with the used-vehicle index soaring from 2.9% to 7% in the same period.

The VPI measures the relationship between the increase in vehicle pricing for new and used vehicles for a basket of passenger vehicles which incorporates 15 top volume manufacturers. The index is created using vehicle sales data from across the industry.

Despite the pricing trends, South African consumers continue to buy more used than new vehicles, notes the VPI report.

“The used-to-new ratio stayed consistent year-on-year, with 2.31 used vehicles sold for every new vehicle.

“Of the used vehicles, 33% are less than two years old, and this continues to decrease as the supply of quality used vehicles remains under pressure.”

Demo models financed made up 5% of used financed deals in the quarter, down 1% from the previous quarter, which indicates consumers remain in the market for older vehicles as quality supply diminishes and pressure on disposable income increases.

Overall, the industry continues its slow recovery from the effects of the Covid-19 pandemic and the civil unrest experienced earlier in 2021, says TransUnion in its report.

Total financial agreement volumes in the passenger market increased by 2.8% year-on-year, with new passenger finance deals up 2.6%, despite the semi-conductor shortage which has disrupted new-vehicle supply chains.

Used-passenger-vehicle deals were up by 2.9%.

TransUnion Africa auto information solutions VP Kriben Reddy says the last time the new-vehicle index was at the current level was in the fourth quarter of 2011, while the used-vehicle index has not been this high since the first quarter of 2004.

“The high demand for quality used vehicles, combined with limited supply, is directly driving the used-vehicle pricing trends we’re seeing right now.

“Sourcing inventory has been a major issue, with consumers and fleets alike holding onto their vehicles for longer.

“With a long waiting list for new vehicles, consumers are opting for the used vehicle market – and prices are not going to ease soon, as interest rates remain relatively low, despite recent hikes.”

Consumer Buying Patterns

Consumer buying patterns showed that nearly half (47%) of new and used financed vehicles are hatchbacks, while one in four (25%) are sports-utility vehicles.

Crossovers make up a higher proportion of new vehicles financed than sedans, which is indicative of consumers looking for multipurpose vehicles, states the TransUnion VPI report.

Almost half of the vehicles financed are being bought by consumers between the ages of 26 and 40.

The percentage of cars (new and used) being financed below R200 000, R200 000 to R300 000 and over R300 000, saw year-on-year movement from the last quarter of 2021, with activity moving from the under R200 000 bracket into the R200 000 to R300 000 bracket, notes the report.

“This shows consumers are looking for value in the used vehicle market despite recent interest rate hikes.

“The car market is also seriously affected by the macroeconomic outlook, where we saw the first economic contraction after four consecutive quarters of growth towards the end of 2021,” says Reddy.

“Consumer confidence remains below zero, and the household debt-to-income ratio remains high, which puts significant pressure on consumers’ disposable income. As a result, many consumers will stay out of the new car market at this stage, despit...

Trans African Concessions (Trac) says it will go ahead with the construction of the much-anticipated Montrose interchange.

This project, valued at R248-million, officially kicked off at the beginning of this year, and will see the upgrading of the existing at-grade intersection to a grade-separated free-flow interchange.

The first phase of this project will include blasting activities to realign 600 m of the existing Schoemanskloof carriageway.

The initiative will also include the construction of four new interchange ramps and the widening of the existing two-lane crocodile bridge from two to five lanes.

In addition, two new arch bridges will be constructed to cross the existing Elands Valley section, and to accommodate two new ramps.

New high-mast lighting will also be installed to illuminate the new interchange.

This project is being managed by a Wilson Bayly Holmes-Ovcon (WBHO)/Motheo JV, and is expected to take 15 months, with the provisional completion date set for June next year.

Trac says it believes that the Montrose interchange will create a free-flow, split-level interchange that will greatly improve traffic flow, similar to the two interchanges – Machado and Karino – that were recently constructed on the route.

The rehabilitation project for section 5A between Wonderfontein and Belfast will also start this month.

Roadworks, being done under the management of Actophambili Roads and valued at R244-million, will include the rehabilitation and improvement of the existing road, which is set to be completed by December 2023.

With the start of these projects comes the conclusion of another – the upgrade between Kaapmuiden and Kaalrug in the Nkomazi region.

This 15.5-km portion of the Maputo Corridor now has a four-lane carriageway and a rehabilitated road surface.

Emalahleni – Middelburg Road

Noticeable progress has also been made on Trac’s other major construction projects underway on the South African side of the N4 Route, says the concessionaire.

The rehabilitation project between the OR Tambo and Van Dyksdrift interchanges in the Highveld region is 85% complete, with completion expected in March.

The R380-million project, being built by Raubex Construction, includes removing and replacing concrete slabs from the originally constructed concrete surfaced

road, overlaying the entire section with asphalt and constructing an additional seven kilometres of passing lanes.

Belfast-Machado Rehabilitation and Upgrade

The major upgrade between Belfast and Machadodorp is progressing well and is 90% complete, notes Trac.

The R400-million project, undertaken by WBHO, includes constructing an additional lane per direction and thus upgrading this section to a four-lane road.

A new interchange at Machadodorp was built under this project and officially opened in September.

Roadwork teams have started an additional component of this project – the construction of the Milly’s underpass – which, together with the remaining roadworks, is scheduled for completion in June this year.

Karino Interchange

The Mbombela-based Karino interchange project is valued at R390-million and is 88% complete.

Implemented by Raubex Construction, it constitutes the upgrading of the existing intersection into a grade-separated interchange, with on- and off-ramps.

The project also includes a bridge that will separate cross-traffic from through-traffic to ease flow at the busy intersection.

Although the project has experienced unforeseen delays, it is progressing steadily, with completion scheduled for March, notes Trac.

A new report on ‘The role of gas in South Africa’s path to net-zero’ argues in favour of a pathway based on the importation of liquefied natural gas (LNG), which it describes as “optimal” because it minimises the risk of stranded assets and gas infrastructure lock-in post-2040.

In addition, such a pathway is less complex and capital intensive than ones based on the possible exploration and development of domestic gas fields and/or the building of a pipeline to import gas from northern Mozambique.

Published by the National Business Initiative, Business Unity South Africa and the Boston Consulting Group, the report forms part of a broader research and consultative process on the decarbonisation of key sectors of the South African economy.

It concludes that gas can, if affordably supplied, play a role as a “transition fuel” to replace more emissions-intensive fossil fuels such as coal and diesel.

In addition, gas could complement battery storage to provide flexible capacity and enable a rapid scaling up of renewables, until alternative long-duration energy storage solutions and greener fuels become affordable.

The report assesses five possible pathways, including having no additional gas supply whatsoever – a scenario that is not recommended based on an analysis indicating that cumulative emissions would be 400 Mt to 600 Mt higher than under scenarios with additional gas supply.

Such an outcome is due, the reports explains, to the prolonged use of more carbon-intense fossil fuels such as diesel and coal, before greener alternatives become economically viable.

Other pathways assessed include both the building of a gas pipeline linking South Africa to the Rovuma gasfields in northern Mozambique and/or the development of domestic gas discoveries, such as Brulpadda and Luiperd.

It concludes, however, that the ‘LNG pathway’ would be the optimal supply option to meet South Africa’s gas demand and to address the supply constraints from the diminishing Pande-Temane reserves, South Africa’s only current major source of gas supply.

The report argues that the LNG pathway carries relatively low infrastructure and technology lock-in risks once demand ramps down post-2040, noting that gas will have to be phased out entirely by 2050 and replaced with greener alternatives for South Africa to achieve a net-zero-by-2050 target.

In addition, the capital expenditure required to install floating storage regasification unit (FSRU) infrastructure (R20-billion to R50-billion) and an inland pipeline (R25-billion to R50-billion) would be far lower than the R200-billion required for a pathway based on an importation pipeline and the development of domestic deposits.

That said, any new investments in gas infrastructure should consider the future repurposing of the assets to use green gases, such as green hydrogen blends and green hydrogen.

The negative impact on the trade balance associated with the LNG pathway, the reports states, would need to be offset by new green export industries, such as a South African e-fuels industry.

The report assumes that South Africa’s potential future gas demand will be driven by the four key sectors of electricity, synthetic fuels production, industry and transport.

It states that gas-to-power (GTP) plants will displace diesel and enable a high penetration of renewable energy in the power system by providing the flexible capacity to manage the long-duration intermittency that battery storage cannot currently address.

“As an alternative to diesel, the power sector can afford gas, for predominantly peaking capacity, at delivered prices of up to R300/GJ.”

Given this high affordability threshold, the report states that GTP plants could serve as a demand anchor to enable the optimal supply option for South Africa.

“It is therefore critical that energy planning policy gives clarity to the deployment, operating regime, and location of GTP plants beyond 2030.”

Should the LNG pathway be pursued, the report recommends a multi-hub a...

Total new-vehicle sales in South Africa should reach at least 540 000 units this year, says Toyota South Africa Motors (TSAM) president and CEO Andrew Kirby.

“The breakdown for this year’s forecast includes 334 800 passenger models, 178 198 light commercial vehicles, as well as 27 002 medium and heavy vehicles.”

Kirby says TSAM’s forecast is based on a variety of socioeconomic factors that do not bode well for the local motor industry, including a rising interest rate cycle, the strain on the agricultural sector owing to heavy rainfall, muted tourism recovery, as well as possible market instability on the back of ANC leadership elections and upcoming wage negotiations.

He adds that this forecast was at the bottom end of the potential market, and that the industry could sell more vehicles if the economy performed better than expected, or if issues in the automotive supply chain were resolved.

Kirby warns, however, that there is a real risk of price increases on new vehicles owing to challenges in the supply chain, which is putting pressure on input costs.

These include a 400% jump in the dollar rate of a 40-ft shipping container compared with the period prior to Covid-19.

TSAM sales and marketing senior VP Leon Theron notes Toyota will take clear aim at the new-energy vehicle (NEV) market as one of its primary focus areas this year.

NEVs includes hybrid, plug-in hybrids and battery electric vehicles (BEVs).

He says TSAM had a 50% market share in NEVs in South Africa in 2021.

He adds that the local arm of the Japanese car maker is aiming for 40% of its passenger car sales to be NEVs by 2025.

“That is how aggressive we are going forward. We are a serious player in NEVs. Our road map is clear. It is hybrid, plug-in hybrid, and BEVs will follow. We need to be sensible about this.”

Theron says hybrids need to move into the domestic market first, owing to constraints on BEV adoption.

These include the current import duty regime, as well as the power supply problems experienced by Eskom.

Kirby adds that South Africa will struggle to reach its renewable energy generation targets.

For BEVs to reach their full potential in terms of environmental benefits, they cannot use electricity generated by coal-fired power stations.

That does not, however mean that South Africa should not “move ahead” and install charging infrastructure, or prepare itself in terms of the support, sales and servicing of BEVs, says Kirby.

“I think it is going to be a long time frame for us and we need to be realistic about it. It doesn’t mean there aren’t big advantages to BEVs, but right now the real benefits and size of the market is small, until we address the problems around power supply.”

Kirby adds that the local automotive industry expects some clarity on government’s 2021 Green Paper on incentivising the local manufacture and purchase of NEVs by the end of this year.

“There is no concrete direction yet from the South African government. We expect it to be announced this year.

“It is a very important step for us to get those incentives in place.”

He says it is important to produce NEVs in South Africa and Africa.

“If we simply import all the new-tech vehicles, we’ll lose out on the industrialisation opportunities [introduced by NEVs].”

Kirby adds that people often tend to only think of batteries when considering BEVs, but that a lot of componentry will remain the same as in internal combustion engines, such as the traction motor, inverter, wiring harnesses and energy management system.

The respective roles of the public and the private sectors in creating jobs came under the spotlight again on Monday as political leaders responded to President Cyril Ramaphosa’s most recent State of the Nation Address (SoNA), in which he emphasised the centrality of the private sector in creating employment.

In his marathon February 10 speech, Ramaphosa asserted that business rather than government created jobs and that the “State must create an environment in which the private sector can invest and unleash the dynamism of the economy”.

The statement was generally supported by business, as was the new initiative announced to cut red tape, despite there being some circumspection over Ramaphosa setting a 100-day deadline for the reaching of a “new consensus” on the revival of the economy, given that the existing Economic Reconstruction and Recovery Plan had been widely canvassed.

However, the political leaders who responded to the SoNA on Monday latched on to the issue, in an effort to both highlight the fractures in the governing ANC on the matter and to underline their respective philosophies and approaches to job creation.

The leader of the official opposition John Steenhuisen said that large parts of the President’s speech were “straight from the DA’s playbook”, before dismissing the address by saying: “Nice words, pity it won’t happen.”

He also questioned whether he had the backing of his own party, which he said was “obsessed with centralised control of the economy and reliant on a massively bloated public sector”.

In a piece of political theatre Steenhuisen offered his assistance to the President’s reform agenda by announcing his tabling of a ‘Motion of No Confidence’ in Ramaphosa’s entire Cabinet and promised the DA’s support for various Bills once “this House fires them for you”.

The ideological divisions on the public-versus-private debate became immediately clear when, in his official SoNA response, the Economic Freedom Fighters’ Julius Malema described it as “historically and empirically incorrect to suggest that the sole role of governments and the State is to create conditions for the private sector to create jobs”.

“The history of capitalism whether private or State capitalism whether in the West or East has demonstrated that the State always plays a direct role in the creation and protection of jobs,” he said, quoting some specific examples of public sector job creation from Brics bloc countries such as Brazil, Russia and China.

“Despite this basic and verifiable reality and statistic, a president of a former liberation movement comes here to say that government does not create jobs, and the hopeless people of our people must wait for the private sector to create jobs for them,” Malema said, before going as far as to argue that “sending people to the private sector for jobs is like sending a cattle to the slaughter”.

On the other extreme, the Inkatha Freedom Party’s Narend Singh, who spoke on behalf of Mangosuthu Buthelezi, evoked a Thatcherite vision of weakened trade unions or stimulating the economy, while Freedom Front Plus leader Pieter Groenewald said he would only accept that Ramaphosa was serious about economic growth if labour legislation was amended to ensure unions had less power and if black economic empowerment and affirmative action were scrapped.

Recognising that his statement on the role of the private sector had touched a nerve, Ramaphosa used his weekly newsletter to add nuance to his SoNA speech by asserting that both a capable developmental State and a dynamic and agile private sector were required to create jobs.

“This idea is not new,” the President wrote quoting the ANC’s 1992 ‘Ready to Govern’ document, which “envisaged a democratic State with ultimate responsibility for ‘coordinating, planning and guiding the development of the economy towards a sustainable growth pattern’ in cooperation with the trade union movement, business and other organs of society.

“The document further envisag...