Governance & Politics - 12 February 2024

11 Feb 2024

GOVERNANCE & POLITICS

• President Ramaphosa delivered a State of the Nation Address (SONA) that mostly reflected on the government’s past achievements and progress on some ongoing initiatives rather than any new policy proposals. The President talked about government’s ongoing interventions in addressing South Africa’s infrastructure constraints including the previously announced plans to build more than 14 000km of electricity transmission lines and allowing private sector participants in the rail network. He said that the R350/month Social Relief of Distress (SRD) grant, which was introduced as part of the government’s COVID-19 policy response, would be extended and improved. On the National Health Insurance (NHI) he said that the government plans to gradually implement the policy. (Source)

• National minimum wage. Various organisations have responded to government’s decision to increase the national minimum wage by 8.5% to R27.58 an hour, effective from March 1. Youth development agency Afrika Tikkun says that while this increase will enhance the quality of life and dignity of the poorest of poor, there are also potential negative consequences, especially in the country with high youth unemployment level. While advocating for the need to address inequality, CEO Onyi Nwaneri posits that the decision “may inadvertently discourage job creation”. “A blanket minimum wage increase, though well-intentioned, poses challenges for businesses, especially for small, medium-sized and microenterprises, which are the lifeblood of South Africa’s economy. Expensive labour and stringent labour policies hinder job creation and will hamper the country’s efforts to provide access to the economy. This will ultimately counteract the government’s goal of reducing dependence on welfare,” says Nwaneri. (Source)

• Trucks destroying N2. The surge in trucks on national corridors is destroying the road infrastructure in the coal belt, the SA National Roads Agency has warned. The agency, which is responsible for the construction and maintenance of the national road network, said the N2 from Ermelo to Pongola is the hardest hit. It was constructed 40 years ago for about 200 trucks a day but is now required to carry about 2 500 trucks a day. (Source)

• More pension reforms. A second phase of retirement fund reform is envisaged by the Treasury to allow retrenched workers access to some of their retirement funds after the planned introduction of the two-pot system on 1 September. In terms of the first phase, which is in the process of being legislated, workers will have access to their retirement funds only on retirement, not before. (Source)