Some of these highlights from the 2017 State of the Nation address could assist you in crafting a successful strategy for your business this year.
As you plan for 2017 and beyond, taking note of President Jacob Zuma’s 2017 State of the Nation Address (SONA) can enable you to develop a well-rounded business strategy that’s aligned with the times. Factoring in some of the president’s statements in your tactics can ensure that your next financial year ends on point when it comes to achieving revenue targets.
These are the key takeaways from 2017’s SONA:
Understanding how the economy is performing and the government’s plans for economic growth can directly impact your business strategy, regardless of industry or sector. In the SONA President Zuma said: “The global economic environment remains uncertain, but the South African economy is recovering. We hope to see growth this year despite the challenges.”
He explained that the local economy must grow faster to improve job creation and government’s aim is to focus on its nine-point plan, which will, according to President Zuma, “reignite growth, focusing on industrialisation, mining, beneficiation, agriculture, agro-processing, energy, small businesses, managing work place conflict, attracting investments, growing the oceans economy and tourism.”
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Infrastructure in South Africa is important for all business types. For example, numerous sectors rely on the transport and logistics sector, that in turn also rely on the upkeep of the road networks. Every business relies on stable electricity and industries rely on a constant water supply too.
This is what the president said about infrastructure development:
“Eskom’s building and maintenance programmes will ensure electrical stability and end load-shedding.” The government is focusing on increasing energy sustainability and security, which will ensure your business is never suddenly in the dark again.
There are numerous areas in the country that don’t have a stable and sustainable water supply. “Government is working hard to ensure reliable bulk water supply across the country. Ten thousand unemployed youth are being trained as plumbers, artisans and water agents to support the War on Leaks programme.”
Road and Rail
“SANRAL has started with the planning phase of a R4.5 billion project to upgrade the current Moloto Road. During 2016, South Africa also signed a co-operation agreement with the People’s Republic of China to build the Moloto Rail Development Corridor.”
3. Socio-economic transformation
New regulations will make it compulsory for big infrastructure contractors to subcontract 30% of their work to black-owned enterprises as of January 20th. President Zuma said: “Through this, government can empower small enterprises, rural and township enterprises, designated groups and to promote local industrial development.”
“The Department of Economic Development will invest R100 million on capital and maintenance programmes to modernise harbours. They will also continue generating revenue from letting state-owned harbours and coastline properties, which will benefit black owned SMMEs,” he added.
President Zuma continued to say that government is planning to pursue policies that will broaden participation amongst black people in the economy. SMME’s, including women and the youth in the Information and Communication Technologies (ICT) sector are also to receive greater assistance from government this year.
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“Going forward, government will implement programmes such as the Strengthening of Relative Rights programme, also known as the 50-50 programme. In this programme, the farm workers join together into a legal entity and together with the farm owner create a new company, and the workers and the owner become joint owners,” explains President Zuma.
These developments might aid or assist your plans to extend or diversify the farm this year. Standard Bank’s Agri sector experts can assist you in evaluating how to move forward.
5. Foreign trade
To enhance foreign trade, “government established InvestSA, an investment One-Stop-Shop nationally. The message being there must be no delays and no unnecessary red tape when issuing licences to visas, we should make it easy to do business in South Africa,” said President Zuma.
He continued to say: “Trade with partners in the west remains a significant contributor to our economy. We will continue to partner with the United States and work on issues of mutual interest such as the full renewal of AGOA.”
“We are also pleased with agreements with our BRICS partners in agriculture. We will implement agreements on the export of fruit and pork to India, as well as the export of 20 000 tons of beef to China per year for a period of 10 years,” he added.
“At continental partnership level, the Joint Africa-EU Strategy remains an important long-term framework for continued co-operation. The Economic Partnership agreement with the EU came into force in September 2016 thus providing new market access opportunities for South African products.
Almost all South African products, about 99% will have preferential market access in the EU.
About 96% of the products will enter the EU market without being subjected to customs duties or quantitative restrictions,” he said.
To ensure the success of your business this year, take advantage of what President Zuma said during the 2017 SONA. Factor it into your strategies. It can assist your business to grow from strength to strength in what most financial commentators say will remain a challenging local economy nevertheless.