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S Africa – mixed balance sheet for Zuma promises;signs of youth discontent

Mail and Guardian

Jacob Zuma’s administration has implemented some of the promises he made in last year’s State of the Nation address, but struggled to fulfil others.

In his address last year, Zuma outlined a new emphasis on infrastructure development. (Madelene Cronje, MG)
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The lack of time frames for some crucial projects and the failure to meet implementation deadlines has forced him to carry over announcements he began making a year or two ago.

In his address last year, Zuma outlined a new emphasis on infrastructure development. This has been given practical expression with the presidential infrastructure co-ordinating committee and the national infrastructure plan launched late last year. The committee identified 18 strategic infrastructure projects intended to address everything from logistics to energy, social programmes, water and sanitation.

In his 2012 address, Zuma focused on the completion of the Medupi and Kusile power stations, and outlined five geographically focused infrastructure projects. They included the development of a south-eastern node that incorporates the building of the Umzimvubu dam and irrigation system, and an oil refinery at Coega; the Durban-Gauteng logistics corridor; and unlocking the mineral belt in the Waterberg region.

A number of these plans were already on the cards or dovetail with existing plans of state-owned enterprises, such as Transnet’s market demand strategy, which is designed to boost rail and logistics capacity.

The Passenger Rail Agency of South Africa has undertaken a massive rolling stock renewal programme to acquire a new fleet of modern passenger coaches over a 20-year period at an estimated cost of R137-billion. Commuters will have to wait for at least two more years before the trains are put to use because the first batch is only expected in 2015, said rail agency spokesperson Moffet Mofokeng.

Graphic: John McCann

A tender for manufacturing the trains was awarded to Gibela Rail Transportation in December last year. To conclude the second part of the rolling stock fleet renewal programme, the passenger rail agency needs to appoint a black economic empowerment partner for Gibela.

Infrastructure proposals Implementation of all the plans is set to be a multi-decade process and financing remains a formidable challenge. In the 2012 budget the infrastructure proposals were estimated to be worth R3.2-trillion. But a number of the programmes were not budgeted for because they remained in pre-feasibility stage.

Existing projects are also facing their own challenges – notably Medupi and Kusile. Eskom maintains that Medupi is on track to be commissioned late this year but the project has been substantially delayed, faced cost overruns and been beset by labour unrest. About 20% of the funding for Kusile must still be secured, though the utility is confident it can obtain this. However, it faces a great deal of opposition from the public over a requested 16% per annum over the next five years tariff hike of 16% a year ago.

There has also been criticism that the roll-out of the infrastructure programmes has been relatively slow and financial feasibility issues still hang over proposed projects.

Questions remain over the cost and necessity of a fuel refinery at the Coega Industrial Development Zone near Port Elizabeth. It forms part of the southeastern node project and threatens to put a number of existing refineries out of business.

The Mail & Guardian also monitored the progress on other major projects announced in Zuma’s speech.

Home loan fund A R1-billion guaranteed fund to promote access to home loans was supposed to come into effect from April 2012. The National Housing Finance Corporation was going to manage it. This was a promise carried over from the 2011 speech. Two years later it is yet to be fully implemented.

When the initial undertaking that the government’s R1-billion mortgage-backed insurance fund would kick off in October 2012 failed to materialise, the corporation moved the implementation date to this year. The mortgage default insurance product programme, as it will be known, will give lower-income consumers the opportunity to qualify for loans that they otherwise wouldn’t qualify for.

“Initially, we expect that by March 31, 7 000 mortgage finance loans would be granted by various participating lenders in the programme,” reads the corporation’s 2012 annual report. Discussions about risk mitigation and sharing the risks between commercial banks and the corporation have delayed the process. The finance-linked individual subsidy programme subsidy, launched in April last year, applies to newly built houses with a price tag of R300 000 or less. The subsidy is meant for households that earn between R3500 and R15 000 a month.

Refurbishment of hospitals and nurses’ homesLast year the government budgeted R450-million to upgrade about 30 nursing colleges and R426-million was allocated for rebuilding five major tertiary hospitals. To deal with the shortage of nurses, the government put aside R1.2-billion to refurbish nursing training colleges.  Despite the notable progress, there is still a huge backlog of rural health facilities. National Education, Health and Allied Workers’ Union spokesperson Sizwe Pamla said progress has been “too slow”.

“There’s a lot of work that still needs to be done. Some rural clinics run out of water and if you’re running a health facility of any form you can’t afford to run out of water and electricity,” said Pamla.

“What concerns us more is that there are no time frames [for implementation]. Health was a priority area in the 2009 manifesto.”

Labour broking There’s still a stand-off between the ANC and its ally, labour federation Cosatu, on this one. Cosatu wants labour brokers banned altogether, believing it to be an abusive practice, but the ANC’s national congress resolved to regulate the industry.

New universitites R300-million has been allocated for the preparatory work towards building new universities in Mpumalanga and Northern Cape. Groundwork has begun but little progress has been made. This is partly because the budget allocated to this can only fund foundation work.

Job creation The Industrial Development Corporation has implemented an investment programme and has a budget of R10-billion over the next five years to invest in economic activities that have a high job creation potential. The corporation’s spokesperson, Mandla Mpangase, said the programme was “well on track” and funding of R1.5-billion was approved in the first nine months. The businesses for which funding was approved are expected to create 8160 direct jobs, said Mpangase.

Youth unhappy with Zuma leadership

Young South Africans between the ages of 18 and 34 are unhappy with President Jacob Zuma’s performance, according to the latest survey conducted by Pondering Panda, a Cape-Town based company.

Two in three (62%) of the 1087 respondents said they were unhappy with Zuma’s way of running the country. The survey results were released on Wednesday, a week before Zuma is to deliver his State of the Nation address in Parliament next Thursday.

“Black respondents are the most positive, with 37% saying Zuma is doing a good job,” the survey found. “KwaZulu-Natal is the only province with more than 50% of respondents saying Zuma is doing a good job.”

An Ipsos survey in December found that four out of every 10 (39%) South Africans thought the country was going in the right direction with Zuma at the helm. This figure had dropped seven percentage points from 46% in May last year. The number of those who said the country was going in the wrong direction increased in December to 42% from 33% in May. – Mmanaledi Mataboge & Charles Molele  M&G