President Cyril Ramaphosa: 2023 State of the Nation Address

State of the Nation Address by President Cyril Ramaphosa Cape Town City Hall 9 February 2023

Speaker of the National Assembly, Ms Nosiviwe Mapisa-Nqakula, Chairperson of the National Council of Provinces, Mr Amos Masondo, Deputy President David Mabuza,
The Executive Mayor of the City of Cape Town, Mr Geordin Hill-Lewis, Former President Thabo Mbeki,
Former Deputy President Baleka Mbete,
President of the Pan African Parliament, The Right Honourable Chief Fortune Charumbira, Chief Justice Raymond Zondo and Members of the Judiciary,
Heads of Institutions Supporting Democracy,
Deputy President of the governing party, Mr Paul Mashatile and leaders of all parties, Members of Parliament,
Fellow South Africans,

It is a great honour to stand before you this evening to present the State of the Nation.

For we are a nation defined not by the oceans and rivers that form the boundaries of our land.

We are not defined by the minerals under our earth or the spectacular landscape above it. We are not even defined by the languages we speak or the songs we sing or the work we do.

We are, at our most essential, a nation defined by hope and resilience.

It was hope that sustained our struggle for freedom, and it is hope that swells our sails as we steer our country out of turbulent waters to calmer seas.

Even in these trying times, it is hope that sustains us and fuels our determination to overcome even the greatest of difficulties.

Just three years ago, our country was devastated by the worst global pandemic in living memory. Thousands of lives were lost, companies closed, jobs were lost.

COVID 19 did not browbeat us into submission or disillusionment.

Working together, we overcame that crisis, and we have started to recover. Today our economy is larger than it was before the pandemic.

Between the third quarters of 2021 and 2022, around one and a half million new jobs were created in our economy.

The Presidential Employment Stimulus has provided work and livelihood opportunities to more than one million people.

Last year, our matriculants defied the effects of the pandemic to achieve a pass rate of 80 per cent and we congratulate them for that great achievement.

We see this spirit of determination in our artists, musicians, actors, authors and sportsmen and women, who are making waves at home, on the continent and beyond our shores.

Banyana Banyana made us proud when they won the Women's African Cup of Nations to become the champions of Africa.

Zakes Bantwini, Nomcebo Zikode and Wouter Kellerman have made us proud at the Grammy Awards for their collaboration, Bayethe.

What we have achieved as a nation over the past year, despite our challenges, remind us that the promise of South Africa is alive.

The progress we have seen should give us courage as we look to a better future.

And yet, I address you this evening, in homes across the country, many people are suffering, many are worried, many are uncertain and many are without hope.

But of this I am certain. Whatever the difficulties of the moment, whatever crises we face, we will rise to meet them together and, together, we will overcome them.

This we will be able to do if we work together and leave no one behind. We gather here at a time of crisis.

Our country has, for many months, endured a debilitating electricity shortage that has caused immense damage to our economy.

And for two years before that, our society was devastated by the COVID-19 pandemic that caused great loss of life and much hardship.

The pandemic worsened a situation of deep unemployment, as the country lost 2 million jobs. The pandemic negatively affected livelihoods and increased poverty.

In July 2021, we experienced the worst public violence and destruction in the history of our democracy, causing over 300 deaths.

Last year, parts of the Eastern Cape, KwaZulu-Natal and North West were struck by catastrophic flooding that caused extensive loss of life, the destruction of homes and damage to infrastructure.

And now, persistent load shedding is impeding our recovery from the effects of these events.

We know that without a reliable supply of electricity, businesses cannot grow, assembly lines cannot run, crops cannot be irrigated and basic services are interrupted.

Load shedding means that households and supermarkets are unable to keep food fresh, water supply is often disrupted, traffic lights do not work, streets are not lit at night.

Without a reliable supply of electricity our efforts to grow an inclusive economy that creates jobs and reduces poverty will not succeed.

Therefore, as we outline our agenda for the year ahead, our most immediate task is to dramatically reduce the severity of load shedding in the coming months and ultimately end load shedding altogether.

Under these conditions, we cannot proceed as we usually would.

The people of South Africa want action, they want solutions and they want government to work for them.

They simply want to know when a problem like load shedding will be brought to an end.

We are therefore focused on those actions that will make a meaningful difference now, that will enable real progress within the next year and that will lay a foundation for a sustained recovery into the future.

We are not presenting new plans, nor are we outlining here the full programme of government.

Rather we are concentrating on those issues that concern South Africans the most: Load shedding. Unemployment. Poverty and the rising cost of living. Crime and corruption.

There are no easy solutions to any of these challenges.

Yet we have the strength, the means and the wherewithal to overcome them.

If we work together and act boldly and decisively, leaving no one behind, we will be able to resolve our challenges.

This State of the Nation Address is about seeing hope where there is despair. It is about showing a way out of these crises. This evening, we will give an account of our progress in implementing the commitments we made in last year's State of the Nation Address.

Over the course of the last year, we have laid a firm foundation based on the commitments we made for faster growth through our investment drive, economic reforms, public employment programmes and an expanding infrastructure programme.

What is clear from our experience of the last few years - indeed from our history as a democracy - is that we are not a people easily resigned to our fate.

When we faced the greatest challenge of apartheid, we did not submit to the oppression that the apartheid regime imposed on our people.

We stood firm and engaged in a struggle, hopeful that our cause would triumph. And it did. Against all odds we were able to defeat the apartheid system.

We can and we will change the circumstances in which we find ourselves today.

We are both able and determined to overcome these difficulties and place our economy on a firm path to recovery.

Our most immediate priority is to restore energy security.

We are in the grip of a profound energy crisis, the seeds of which were planted many years ago.

We cannot undo the mistakes that were made in the past, the capacity that was not built, the damage that was done to our power plants due to a lack of maintenance, or the effects of state capture on our institutions.

What we can do is to fix the problem today, to keep the lights on tomorrow and for generations to come.

In July last year, I announced a clear action plan to address the energy crisis. This was to address the electricity shortfall of 4,000 to 6,000 MW.

The plan outlined five key interventions:

• First, fix Eskom's coal-fired power stations and improve the availability of existing supply.
• Second, enable and accelerate private investment in generation capacity.
• Three, accelerate procurement of new capacity from renewables, gas and battery storage.
• Four, unleash businesses and households to invest in rooftop solar.
• Five, fundamentally transform the electricity sector to achieve long-term energy security. Experts agree that this plan is the most realistic route to end load shedding.

During the last six months, we have made important progress in implementing the plan.

We have taken steps to improve the performance of Eskom's existing power stations so that the coal-fired power stations that provide 80 per cent of our electricity produce the amount of electricity for which they were designed.

Under its new board, Eskom is deploying people and resources to improve the reliability of the six power stations that have contributed the most to load shedding.

Eskom is urgently fast-tracking construction of a temporary solution to bring back three units at Kusile power station following the collapse of a chimney stack last year, whilst simultaneously repairing the permanent structure.

We are rebuilding the skills that have been lost and have already recruited skilled personnel at senior levels to be deployed at underperforming power stations.

The Engineering Council of South Africa has offered to give as much assistance as required by deploying engineers to work with the management teams at power stations.

We have deep skills and expertise right here in South Africa - we just need to use them.

National Treasury is finalising a solution to Eskom's R400 billion debt burden in a manner that is equitable and fair to all stakeholders, which will enable the utility to make necessary investments in maintenance and transmission.

Government will support Eskom to secure additional funding to purchase diesel for the rest of the financial year. This should reduce the severity of load shedding as Eskom will be able to use its diesel-run plants when the system is under strain.

Eskom has launched a programme to buy excess power from private generators and has already secured 300 MW from our neighbouring countries.

The South African Police Service has established a dedicated team with senior leadership to deal with the pervasive corruption and theft at several power stations that has contributed to the poor performance of these stations. Intelligence-driven operations at Eskom-related sites have so far resulted in 43 arrests.

As part of the broader reform process, the restructuring of Eskom that we previously announced is proceeding and the National Transmission Company will be soon operational with an independent board.

Later this year, we will table the Electricity Regulation Amendment Bill to transform the energy sector and establish a competitive electricity market.

As indicated in July last year, and with a view to addressing the load shedding crisis, we are going to proceed with the rollout of rooftop solar panels.

In his Budget Speech, the Minister of Finance will outline how households will be assisted and how businesses will be able to benefit from a tax incentive.

National Treasury is working on adjustments to the bounce-back loan scheme to help small businesses invest in solar equipment, and to allow banks and development finance institutions to borrow directly from the scheme to facilitate the leasing of solar panels to their customers.

One of the potent reforms we have embarked upon is to allow private developers to generate electricity. There are now more than 100 projects, which are expected to provide over 9,000 MW of new capacity over time.

A number of companies that have participated in the renewable energy programme will soon enter construction and deliver a total of 2,800 MW of new capacity.

Eskom will procure emergency power that can be deployed within six months to close the immediate gap.

We are investing in new transmission lines and substations, especially in areas such as the Eastern Cape, Northern Cape and Western Cape.

All of these measures will result in a massive increase in power to the grid over the next 12 to 18 months and beyond.

This power will be in line with our diverse mix of energy sources, including our current coal- fired power stations, solar, wind, gas, nuclear, hydro and battery storage.

To fully implement this plan, we need strong central coordination and decisive action. In a time of crisis, we need a single point of command and a single line of march.

Just as we address the cause of the crisis, we also need to address its impact. The crisis has progressively evolved to affect every part of society.

We must act to lessen the impact of the crisis on farmers, on small businesses, on our water infrastructure and our transport network.

The National Disaster Management Centre has consequently classified the energy crisis and its impact as a disaster.

We are therefore declaring a national state of disaster to respond to the electricity crisis and its effects.

The Minister of Cooperative Governance and Traditional Affairs has just gazetted the declaration of the State of Disaster, which will begin with immediate effect.

The state of disaster will enable us to provide practical measures that we need to take to support businesses in the food production, storage and retail supply chain, including for the rollout of generators, solar panels and uninterrupted power supply.

Where technically possible, it will enable us to exempt critical infrastructure such as hospitals and water treatment plants from load shedding.

And it will enable us to accelerate energy projects and limit regulatory requirements while maintaining rigorous environmental protections, procurement principles and technical standards.

The Auditor-General will be brought in to ensure continuous monitoring of expenditure, in order to guard against any abuses of the funds needed to attend to this disaster.

To deal more effectively and urgently with the challenges that confront us, I will appoint a Minister of Electricity in the Presidency to assume full responsibility for overseeing all aspects of the electricity crisis response, including the work of the National Energy Crisis Committee.

The Minister will focus full-time and work with the Eskom board and management on ending load shedding and ensuring that the Energy Action Plan is implemented without delay.

So as to remove any confusion, the Minister of Public Enterprises will remain the shareholder representative of Eskom and steer the restructuring of Eskom, ensure the establishment of the transmission company, oversee the implementation of the just energy transition programme, and oversee the establishment of the SOE Holding Company.

The process of restructuring government will give us an opportunity to determine the positioning of various areas of responsibilities and how best the various ministries and departments can best serve our national objectives. We are focusing our attention on the energy crisis right now and will address the restructuring of government in due course.

This is necessary because an effective response to this crisis involves several different departments and entities that require coordination from the centre of government.

We will be including other social partners in an effective structure similar to the one we set up to drive the vaccine rollout.

Extraordinary circumstances call for extraordinary measures.

The energy crisis is an existential threat to our economy and social fabric.

We must spare no effort, and we must allow no delay, in implementing these measures.

As we take these actions to resolve the energy crisis, we are mindful of the risks that climate change poses to our society.

Extreme weather events in the form of drought, floods and wild fires increasingly pose a risk to the health, well-being and safety of people.

We will continue our just transition to a low carbon economy at a pace our country can afford and in a manner that ensures energy security.

We will undertake our just transition in a way that opens up the possibility of new investments, new industrialisation and that, above all, creates new jobs.

The Presidential Climate Commission is guiding much of this work, and, in doing so, building a new model for inclusive and collective decision making, incorporating the individuals, workers, and communities that are most affected in the transition.

Through the Just Energy Transition Investment Plan, R1.5 trillion will be invested in our economy over the next five years in new frontiers such as renewable energy, green hydrogen and electric vehicles.

Several new sectors are emerging in the economy, such as major green hydrogen, electric vehicles and fuel cells.

A number of Projects are already underway, including the development of a new facility by Sasol at Boegoebaai in the Northern Cape, the Prieska Power Reserve in the Free State, and the Hydrogen Valley initiative in Limpopo, Gauteng and KwaZulu-Natal.

The Northern Cape has already attracted well over R100 billion in investments in renewable energy projects.

These and other massive investments in renewable energy will create jobs and stimulate local economies not only in the Northern Cape, but also in the Eastern Cape, Western Cape and Mpumalanga, turning even the most arid desert into a giant energy source.

Above all, our just transition will prioritise workers and communities in vulnerable industries to ensure that no one is left behind.

Fellow South Africans,

Our economy needs to grow much faster if we are to meaningfully reduce unemployment.

In the State of the Nation Address last year, we spoke of our intention to forge a comprehensive social compact that would join all social partners in a common programme to rebuild our economy and enable higher growth.

We were not able to conclude a social compact in the timeframe we had envisaged because a number of new circumstances emerged that made it difficult for social partners to forge a consensus.

The social partners have expressed their intention to conclude a social compact and have continued to work on a framework to enable joint action in key areas such as energy, transport and logistics, employment creation and skills development, investment and localisation, social protection, crime and corruption.

While we remain committed to forging a new consensus among all sectors of our society, we have also undertaken practical collaboration in specific areas. A number of other compacts have been concluded amongst social partners.

We see the commitment of all social partners in the compacts that have been forged to fight the COVID-19 pandemic and undertake the largest vaccination programme in our history.

We have seen it in initiatives like the Solidarity Fund that mobilised society, citizen activism and funding to achieve common goals, and in partnerships to end gender-based violence and femicide, and to respond to the effects of climate change.

We have seen the benefits of this approach to promote investment and to develop master plans in sectors of the economy such as automotives, clothing and textiles, poultry, sugar, agriculture and global business services.

The master plans that have been concluded are supporting the revival of the relevant sectors, the injection of investment by the private sector and the creation of new jobs and livelihoods.

We are pleased that social partners, particularly business, has been providing support to implement the Energy Action Plan in the spirit of social compacting. Similarly, we have developed a close working partnership with both labour and community in supporting other aspects of the energy crisis response.

Just as energy is essential for economic growth, so is a reliable water supply and an efficient transport and road infrastructure system.

Our rail network has suffered from many years of underinvestment, lack of maintenance, criminal activity and inefficiency.

To address this, last year, we adopted the National Rail Policy to guide the modernisation and reform of the rail sector, providing, among other things, for third-party access to our rail network.

We are working across government to develop a Transnet Roadmap that will translate our policy commitments into reality, including the restructuring of Transnet Freight Rail to create a separate Infrastructure Manager for the rail network by October 2023.

Transnet and private sector companies will conclude partnerships at the Durban and Ngqura container terminals, to enable new investment in our ports and improve their efficiency.

This will help our ports regain their global position as some of the most efficient ports once again.

There has been great success in repositioning the Port Elizabeth Automotive Terminal, which has more than doubled its capacity and has already seen an increase in exports.

Many more vehicles destined for overseas markets are rolling off the Port Elizabeth automotive terminal.

Transnet is also rehabilitating its idle locomotives and expanding its fleet.

We have faced challenges in the transportation of commuters on passenger rail.

Following the restructuring that is underway in PRASA, 13 commuter rail lines have been reopened, significantly reducing the cost of travel for many workers.

The reliable supply of water is essential for the well-being of people and the growth of our economy.

To ensure water security now and into the future, the Department of Water and Sanitation is leading the process of investing in major infrastructure projects across the country.

After being delayed for several years, full-scale construction works for the Lesotho Highlands Phase Two project will commence this year.

The Lesotho Highlands project is critical for ensuring security of water supply to Gauteng, Free State, Mpumalanga, North West and Northern Cape.

Several decades after it was first proposed and nine years after a sod-turning ceremony was held, the first phase of the Umzimvubu Water Project will start in the next financial year.

This phase, which involves construction of the Ntabelanga Dam, irrigation infrastructure and the distribution of water to communities, will be financed by government.

The next phase will be the construction of the Lilane Dam which will include a hydro power station .

Major projects to increase the capacity of the Clanwilliam Dam, Hazelmere Dam and the Tzaneen Dam will improve the supply of water to the West Coast, eThekwini and the eastern part of Limpopo.

Last year, we announced a comprehensive turnaround plan to streamline the process for water use license applications, which is vital to enable greater investment.

Since then, we have cleared the backlog of water use licenses and reduced the turnaround time for applications to 90 days.

Our infrastructure build programme is gaining pace through the work of the Infrastructure Fund and Infrastructure South Africa, which has been established to support strategic infrastructure projects.

One of the greatest obstacles to infrastructure investment is the lack of technical skills and project management capacity.

To fix this, Infrastructure South Africa has been allocated R600 million for project preparation, specifically in rural and under-resourced areas.

The support and planning mechanisms that we have put in place over several years are now starting to bear fruit in increased public investment in infrastructure.

By January this year, projects worth R232 billion were under construction and projects worth nearly R4 billion had been completed.

The completed projects include new human settlements in Gauteng, road upgrades and the development of small harbours.

In a major development, the South African National Roads Agency - SANRAL - has awarded road construction contracts worth R18 billion over the last three months.

The construction of the Msikaba Bridge and Mtentu Bridge will be finished and make travel in the Eastern Cape much better.

This investment will substantially benefit the construction industry and enable large-scale job creation, skills development and poverty relief, especially in nearby rural communities.

Last year, we said we would increase the construction of rural bridges as part of the Welisizwe programme, to enable residents to easily and safely reach schools, workplaces and amenities.

Twenty-four bridges in KwaZulu-Natal are currently under construction and site preparations are being made for a further 24 bridges.

In the telecommunications sector, the completion of the spectrum auction has unlocked new investment and contributed R14 billion to the fiscus.

During the course of this year, we will migrate the remaining households to digital television signal and complete the switch-off of analogue transmission.

This will release valuable spectrum for the rollout of 5G mobile networks and will reduce the cost of data.

These actions will bring us closer to our vision of affordable, high-speed internet access for all.

In the State of the Nation Address last year, we said that we would concentrate our efforts on mobilising greater levels of investment, which is essential to growing the economy and creating jobs.

We said that we would give impetus to the campaign that we embarked on nearly five years ago to raise R1.2 trillion in new investment.

Last year, the 4th South Africa Investment Conference raised R367 billion in investment commitments, bringing our five-year investment target firmly within sight.

Over the last year, many of these commitments have resulted in the companies that made those commitments investing in new factories, call centres, solar power plants, undersea fibre optic cables, the expansion of production lines and the adoption of new technologies.

Importantly, these investments have resulted in new jobs and new opportunities for small emerging businesses.

On the 13th of April this year, we will hold our 5th South Africa Investment Conference.

At this Conference, we will set a new target to mobilise more than R2 trillion in new investment by 2028.

The investments that have flowed into the economy to date have contributed to a substantial increase in local production.

These investments have encouraged our efforts to buy local.

Last year, I delivered the State of the Nation Address wearing a suit and shoes proudly made in South Africa.

This evening, I am drinking water from a glass made in Wadeville last week by workers from Katlehong, Vosloorus and Germiston.

For many years, South Africa has been importing its drinking glasses. Now we are increasingly making them locally.

But it's not just glasses.

If you go to hospital for an operation, chances are you will receive an anaesthetic made in a world-class manufacturing facility in the Eastern Cape.

During my State Visit to the United Kingdom last year, a South African firm obtained a license to produce an oral vaccine for cholera for the first time here in South Africa

Competition merger agreements have provided for more fuel to be refined locally and more food to be bought from local farmers.

Last year we committed to unlocking investment in the hemp and cannabis sector. We are moving to create the enabling conditions for the sector to grow.

The Department of Agriculture Land Reform and Rural Development and the Department of Health will address existing conditions for the cultivation of hemp and cannabis to allow outdoor cultivation and collection of harvests from traditional farmers.

This will unlock enormous economic energy in the rural areas of the country, especially in the Eastern Cape, KwaZulu-Natal and Mpumalanga.

Urgent work is being finalised by government to create an enabling regulatory framework for a whole plant, all legitimate purposes approach for complimentary medicines, food, cosmetics, and industrial products, aligned to international conventions and best practices.

This includes the reprioritisation of departmental budgets for sector development and support for traditional, black farmers, and the alignment of South African Police Services enforcement with regulatory reforms.

A growing economy must also be an increasingly inclusive economy.