SONA must reveal pro-growth pivot or Ramaphosa will have failed – IRR

As President Ramaphosa prepares to deliver his first State of the Nation Address as head of the GNU, the IRR urges him and all governing parties to return to the pro-growth consensus that underpinned the coalition’s formation in June last year.

This requires acknowledging and correcting mistakes that have strengthened South Africa’s pro-poverty forces – most notably, the recent reckless signing of the Expropriation Act.

Hermann Pretorius, IRR head of strategic communications, warns: “The GNU’s formation might have revived investor curiosity in South Africa, but any claim to an economic victory for anything beyond the short-term would be naively premature.

“South Africa remains on a knife’s edge – only pro-growth market liberalisation, including protecting property rights, reducing state interference, ending race-based economic preferentialism, and rolling out policies that incentivise real investment, can deliver the growth we need as a country.”

The stakes for South Africa have rarely been higher.

Escalating tensions between the Trump administration, with ex-South African billionaire Elon Musk playing a prominent advisory role, and the South African government highlight the consequences of decades of ANC economic mismanagement that also led to the catastrophic loss of its parliamentary majority in last year’s elections.

Washington’s growing hostility, including trade threats and scrutiny of South Africa’s political alignments, stems from years of ANC policy failures that have left the country unnecessarily vulnerable to economic isolation. If the GNU fails to pursue real and rapid pro-growth policy reform, South Africa risks becoming an economic pariah, squandering any GNU economic gains and once more alienating international investors and losing critical trade access.

Despite the ANC’s policy missteps at the time – from race-based overreach and the initial erosions of property rights to the full rollout of cadre deployment as carrier of the state capture virus – its 2004 electoral dominance of near 70% of the vote was built on economic pragmatism and fiscal prudence.

These choices delivered economic growth, forced down unemployment, secured fiscal surpluses, allowed for the rollout of service delivery on an astonishing scale, and put in place the foundations of a welfare safety net.

Returning to this path of economic and electoral success even now remains open to President Ramaphosa, but only if he leads his party and the GNU to reject the ANC’s more recent practices of economic vandalism and pro-poverty wealth extraction.

If Ramaphosa truly seeks to revive his party and secure his own legacy, he must act decisively and announce pro-growth changes in his address in Cape Town this evening. As a non-negotiable start to this pro-growth pivot, the Expropriation Act must be urgently amended to entirely remove the threat of state seizure of property below market asset value.

Adds Pretorius: “South Africa can have economic growth or expropriation without compensation – it cannot have both. Ramaphosa can either lead a floundering government into further decline or take bold steps towards a free-market revival that unleashes prosperity and delivers on the priorities of all South Africans.”

Media contact: Hermann Pretorius IRR Head of Strategic Communications Tel: 079 875 4290 Email: hermann@irr.org.za

Media enquiries: Michael Morris Tel: 066 302 1968 Email: michael@irr.org.za