Reaction to South African President Jacob Zuma's State of the Nation address - where he outlined plans for an ambitious infrastructure development to boost the economy and create jobs - has been generally favorable.
Speaking at the annual opening of parliament in Cape Town, President Zuma promised his government will spend billions of dollars on five major rail, road and water infrastructure projects. Zuma says the projects are aimed at wooing investment in capital intensive sectors to create jobs.
"The massive investment in infrastructure must leave more than just power stations, rail lines, dams and roads," he said. "It must industrialize the country, generate skills and boost much needed job creation.”
Limpopo in the north - a resource rich, and populous but underdeveloped province - is high on the priority list to boost infrastructure in two areas to encourage exploitation of the large deposits of coal, platinum, palladium, chrome and other minerals.
The president noted that in addition to mining these resources, South Africa must also encourage investment in beneficiation. Currently most of the country’s mineral wealth is exported in a raw state.
Other projects will beef up the strategic corridor between the industrial and agricultural centers of Johannesburg and the Free State province and the country’s largest commercial harbor in Durban; the west coast iron-ore corridor and a manganese export channel through the deep water harbor at Port Elizabeth on the south coast.
Finance Minister Pravin Gordhan is to unveil funding details in two weeks, but it is expected that the government will spend some $100 billion over the next three years.
South Africa has struggled to significantly speed up economic growth since the global recession in 2008. This, along with structural defects in the energy sector, has discouraged investors, both local and international.
Aubrey Matshiqi, research fellow at the Helen Suzman Foundation, says the president’s speech was aimed at boosting confidence across the board that he is in charge and taking the country in the right direction.
"The fact that he focused so much on infrastructure development was very positive, because South Africa’s economy does need a boost and the state needs to be at the center of that process, of course working in conjunction with the private sector," said Matshiqi.
But Matshiqi says South Africans need to be cautious as the government’s past track record reveals a significant gap between what has been promised and what has been implemented.
"So while we need to be happy as South Africans about the economic direction our government seems to be taking or intends to take, we do need to ask questions about what the sources of funding for our infrastructure development program will be. Secondly, what the government is going to do with issues of enhancing state capacity particularly as it pertains to state resource leakages in the form of corruption, incompetence and ineffective implementation," said Matshiqi.
In addition to the infrastructure development projects, Zuma also promised the government would build two new universities, one in Limpopo and the other in the Eastern Cape. And he urged South Africans to do all they can to support the country’s bid to host the international Square Kilometer Array radio telescope - the largest in the world to explore new recesses of the universe. South Africa is competing against Australia to host the project and the winning bid will be announced next month.
