Yawn, we have heard this all before. The words are empty, the outlook remains bleak.
This reaction to President Cyril Ramaphosa’s State of the Nation Address (SONA) was probably the case for most property experts last night.
Apart from the announcement that a Minister of Electricity would be appointed to help solve the country’s electricity crisis, these professionals – who are authorities in a sector that has a huge impact on the country’s economy, appear to have experienced déjà vu while watching the address.
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“Every year in the President’s SONA we’ve heard the same promises. They ring hollow to any sane audience,” says Yael Geffen, chief executive of Lew Geffen Sotheby’s International Realty.
“What we all agree on is that South Africa is in crisis. But what we shouldn’t be touting as the solution is adding another fat Ministerial salary to an already bloated public sector wage bill.”
She says the take-away from this year’s address is that it is going to be up to the people of South Africa to overcome the massive challenges facing the country.
“South Africans have skills and we’re an entrepreneurial nation. We’ve also demonstrated through the years that, when we come together, we have a very strong voice; and there’s never been a more crucial time to use it.
“We need to become a community of active citizens.”
For the government to prove it is serious about solving the energy crisis, Geffen says it needs to set a deadline to end load shedding “so that we can rescue our economy and create jobs”.
“And if it doesn’t deliver by the deadline, then it needs to concede its failure, eradicate the rot of State-Owned Enterprises (SOEs), and privatise these sectors so that efficiencies and solutions can be implemented.”
She says South Africa and its people do not deserve this crisis.
“Our people deserve economic growth and they deserve jobs. Non-delivery is no longer an option.”
While High Street Auctions Director Greg Dart says the President announced “myriad laudable programmes”, he states that they “all amount to nothing if government cannot fix the energy crisis that is destroying the economy”.
“In every SONA in recent history we’ve heard the same song: ‘Eskom is in shambles and the government is working on a solution’. This year, as the country has experienced its worst ever load shedding, we’re being told that government is still working on the problem.
“This year, the solution is apparently going to come by way of an Electricity Minister in the Presidency, a State-Owned Enterprises Holding Company in government to oversee the SOE Boards that should be functional entities in their own right, and – most disturbingly – the declaration of a national State of Disaster that gives the Executive extraordinary power to override legislative process.”
Dart says South Africa already has a Public Enterprises Minister and the essence of his job description is to manage public enterprises for the good of the people of this country.
“Now taxpayers are also going to have to foot the bill for the salaries of an Electricity Minister and SOE Holding Company staff while they attempt to fulfil the Public Enterprises Minister’s mandate.”
Until the government moves to privatise the energy sector in South Africa, he says the country is unlikely to see true economic growth.
“Our country needs large-scale investment, which won’t happen until we have a stable energy supply. Businesses need energy to keep production lines running, to expand, and to create employment opportunities. If we don’t have those things, all sectors including real estate, are going to suffer.”
Samuel Seeff, chairman of the Seeff Property Group welcomes all efforts to restore and address the energy crisis, but says that “we need to start seeing action”.
“This includes appointing a cabinet of competence rather than political convenience. The matter is urgent; there is no longer time to linger with policies and delays.”
Additionally, he would like to see local municipalities taking action to keep local economies going.
Tony Clarke, managing director of the Rawson Property Group, says the SONA “made it clear” that South Africa has a long, and largely undefined, road to recovery ahead. Yet again economic recovery took centre stage as well as the fact that the energy crisis was a top priority for government – which is what South Africans needed to hear.
“It was also gratifying to know that there has been some progress, despite all the odds stacked against us last year.”
He adds that there were a number of programmes outlined during the address that could contribute towards growing the economy.
“Every little improvement contributes to positive investor sentiment and encourages participation in sectors, like property, that play essential roles in supporting and growing the economy. If we want to convince investors that economic growth is returning, we need to show zero tolerance for repeating past mistakes.”
One of the most pivotal factors will be the recovery of business and consumer confidence, and he explains that this impacts real estate directly – by increasing people’s willingness to invest in long-term assets like property, and indirectly – by improving job security and income growth and therefore affordability.
In return, he says a healthy property market stimulates the GDP and boosts confidence levels further. Barring disruptions, this creates a self-supporting growth cycle that could contribute significantly to our country’s economic recovery.
However, Clarke notes: “Only time will tell how SONA’s promises play out in reality. All the words in the world mean nothing without fast action.”
Prior to the SONA, property experts had called for the President to take the necessary, critical steps to bring the country back on a growth path.
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