Economic recovery, job creation vital, bloated cabinet to be cut
President Cyril Ramaphosa placed the recovery of the battered economy at the centre of his maiden state of the nation address last night, while also promising to cut a bloated cabinet and reduce government departments.
Delivering his first Sona to a joint sitting of Parliament‚ Ramaphosa said the country was entering “a new era” in which government would make drastic changes in its affairs.
He said it was important for the size of the government to respond to efficient use of public funds.
“It is critical that the structure and size of the state is optimally suited to meet the needs of the people and ensure the most efficient allocation of public resources. We will therefore initiate a process to review the configuration‚ number and size of national government departments‚” he said.
Ramaphosa also made job creation and tackling unemployment a priority, promising a jobs summit this year as well as urgent action on youth unemployment which he described as the country’s “most pressing challenge”.
Ramaphosa said the government would urgently overhaul the appointments of oversight boards of state-owned enterprises (SOEs)‚ which up to now have been plagued by allegations of corruption‚ financial mismanagement and maladministration.
State-owned firms such as Eskom‚ SAA‚ Denel and Transnet have recently been making headlines for all the wrong reasons, to the extent that the power utility and the national carrier are teetering on the brink of bankruptcy.
Ramaphosa‚ who on Thursday took over from former president Jacob Zuma following the latter’s resignation on Wednesday night‚ said non-executive directors would no longer be allowed to take part in procurement at SOEs.
This is seen as a response to revelations that board members of parastatals such as Eskom had irregularly influenced the awarding of multimillion-rand contracts to politically connected business people.
Ramaphosa said the government would also be working with the office of the auditor-general to tighten the auditing of the financial books of SOEs.
“Many of our state-owned enterprises are experiencing severe financial‚ operational and governance challenges‚ which has impacted on the performance of the economy and placed pressure on the fiscus.
“The recent action we have taken at Eskom to strengthen governance‚ root out corruption and restore its financial position is just the beginning.
“These SOEs cannot borrow their way out of their financial difficulties.”
Ramaphosa said the funding model of SOEs would be reviewed, among other measures.
“We will change the way that boards are appointed so that only people with expertise‚ experience and integrity serve in these vital positions.”
The new president also said he would be convening an investment conference in a bid to win foreign investors back.
He said he would be establishing a Presidential Economic Advisory Council to help find solutions to revive the economy.
“We have to build further on the collaboration with business and labour to restore confidence and prevent an investment downgrade.”
The size of the current cabinet has long been criticised as too bloated and wasteful following its controversial expansion by Zuma in 2009. Civil society bodies and opposition parties have also been calling for the size of the cabinet to be reduced.
There are currently 35 cabinet ministers and 37 deputy ministers‚ all allocated official houses – one in Cape Town and one in Pretoria – with support staff stationed in the two cities.
The running of the cabinet is estimated to cost the taxpayer up to R720-million per year. Each of the cabinet ministers currently earns more than R2-million a year while deputy ministers earn just over R1.9-million per annum.
Meanwhile, Zuma snubbed his successor’s first Sona. Zuma’s absence was conspicuous‚ despite him being invited to attend like all other former presidents of the country. Thabo Mbeki and FW de Klerk honoured the invitation.
Ramaphosa began his address by recognising Zuma amid boos from MPs and guests.
“I do wish to thank former president Jacob Zuma for the manner in which he approached this very difficult and sensitive process‚” he said.
Ramaphosa said he wanted to thank Zuma for his service to the nation during his two terms.