Opening on scenes of fiery devastation, looting and violence, President Ramaphosa’s SONA 2022 certainly didn’t shy away from acknowledging the dire state South Africa is in. Despite the lack of sugar-coating – or perhaps because of it – the speech has been widely regarded as surprisingly hopeful.
“From a property perspective, the key factors that we were hoping to see addressed are the recovery of the economy and business and consumer confidence,” says Tony Clarke, MD of the Rawson Property Group. “These impact real estate directly by influencing the perceived security and attractiveness of long-term investments like property. They also contribute to job security and income growth, which directly affect consumer affordability and, consequently, the accessibility of the property market.”
According to Clarke, the president’s frank acknowledgement of the need for transformation was positive for confidence levels, in itself. However, there were a number of more concrete promises that Clarke believes could not only improve confidence levels, but also trigger long-overdue, tangible change.
“One of the most encouraging elements of the speech, for me, was seeing the president publicly acknowledge the critical role of the private sector in job creation and the importance of improving market access,” says Clarke. “If we’re ever going to address our vast unemployment issues, we need to support business growth. A real commitment to cut through the red tape holding businesses – and professionals – back is exceptionally welcome.”
Clarke says this mirrors the direction already taken in the new Property Practitioner’s Act, which has dramatically reduced the time and expense involved in becoming a qualified and self-sufficient real estate agent. By removing similar barriers to entry in other industries, and supporting the growth of small businesses, he believes it’s possible to expedite the entry of more South Africans into the workforce.
“That would not only reduce unemployment and decrease reliance on social grants, it would also add to our shrinking tax base and give a much-needed boost to the fiscus,” says Clarke.
Another potential boost to investor confidence came in the form of the President’s recognition of state capture, and his pledge to see those responsible brought to justice. While Clarke says more detail on how corruption will be prevented in future would have been welcomed, acting on previous wrongs is definitely a step in the right direction.
“If we want to convince investors that economic growth is returning, we need to show zero tolerance for repeating past mistakes,” says Clarke. “That means taking decisive action against those who engineered and profited from state capture, and disincentivising further corruption through the demonstration of appropriately harsh consequences.”
In a, perhaps, more controversial move, the President also reaffirmed his commitment to land redistribution. This, Clarke says, is welcomed by the property industry now that Section 25 of the constitution remains secure.
“We fully support expropriation for the purpose of improving access to land, particularly for agricultural use – we need to feed our country,” says Clarke. “I, for one, am really looking forward to seeing the new expropriation bill as it is going to play a vital role in the future of our country. How we achieve that will say a lot about our values as a nation and deeply influence our standing in the international community. I’m optimistic that our presidency will find a solution that empowers the people of South Africa without impinging on our fundamental human rights.
“Only time will tell how SONA’s promises play out in reality says Clarke. “All the words in the world mean nothing without action.”