Herman van Papendorp | Head | Investment Research & Asset Allocation | Momentum Investments | mail me |
Sanisha Packirisamy | Economist | Momentum Investments | mail me |
Following President Cyril Ramaphosa’s State of the Nation Address (SONA), we have released an analysis of the speech.
SA has registered 3.6 million cases of COVID-19 and just over 96,000 deaths to date. President Cyril Ramaphosa emphasised that our most important tool to mitigate the effects of the COVID-19 pandemic remains the national vaccination programme, as it has been proven to dramatically reduce severe illness, hospitalisation and death.
Data from the Department of Health shows that 41% of SA’s population has been fully vaccinated. This proportion is higher for the older age cohort (above 60 years) at 61% but remains low at 28% for those aged between 18 and 34 years (see chart 1).
Vaccination rates vary widely on the continent (ranging from as high as 192 doses per 100 people in Seychelles to less than 1 dose per 100 people in Burundi) but remains low on average at 26 doses per 100 people.
SA recently established a vaccine manufacturing campus in the Western Cape. Ramaphosa alongside Dr Patrick Soon-Shiong, founder of the multinational conglomerate NantWorks, LLC, launched the campus in January 2022. They have also launched the Coalition to Accelerate Africa’s Access to Advanced Healthcare (AAAH Coalition), which is a step forward to build capacity for advanced health care in Africa, by accelerating domestic production of pharmaceuticals.
Highlights of the analysis
- The rand strengthened into the State of the Nation Address (SONA) but weakened again after the speech. The local unit was likely swayed on higher-than-expected inflation data from the United States.
- The SONA emphasised the importance of the country’s vaccination drive, job and growth initiatives and the need to rebuild a democratic state, improve state capacity and fight state capture and corruption.
- The speech also addressed a continuation in social support measures following the concluding report of an expert panel deliberating on basic income support, which was published in December 2021.
- The importance of rebuilding a social compact among government, business, labour and civil society was once again highlighted as necessary to reduce polarisation and create an enabling environment to promote a national vision. A 100-day deadline was announced to find solutions to boost growth, create jobs and combat hunger.
- In our view, garnering positive consumer, business and investor sentiment requires political buy-in, progress on the execution of the economic development and reconstruction plan and a reduction in political and policy uncertainty. The president’s plan to accelerate South Africa’s (SA) growth trajectory to solve the unemployment quagmire remains heavily reliant on the ability and willingness of the top leadership to execute on the economic plans proposed.
Read the full analysis here.