The South African Federation of Trade Unions (SAFTU) expresses its deep disappointment in the uninspiring State of the Nation Address (SONA) delivered by President Cyril Ramaphosa yesterday. While disappointing, it was hardly unexpected. As anticipated, the president failed to present a decisive break from the neoliberal policies that have entrenched inequality, poverty, and unemployment. Instead, his speech confirmed that neoliberalism will not only continue but will be intensified under the so-called Government of National Unity (GNU).
President Ramaphosa’s promises of a 3% growth rate over the next three years are built on the GNU’s ambitious Medium-Term Development Plan (MTDP) — a five-year framework incorporating the GNU Statement of Intent and the National Development Plan (NDP). The MTDP claims to prioritize inclusive growth, job creation, poverty reduction, and tackling the high cost of living, all while building a capable, ethical, and developmental state.
However, unless the GNU changes its neoliberal course under President Ramaphosa’s leadership, none of these priorities will be achieved. Below, we unpack the key priorities outlined in SONA and expose the contradictions in the government’s approach.
Inclusive Growth and Job Creation
Since 2018, President Ramaphosa has repeatedly claimed that inclusive growth and job creation are his top priorities. Yet, his track record tells a different story. Between 2018 and 2023, South Africa’s average growth rate stagnated at a meagre 0.5% annually. Under his leadership from 2019 to 2024, unemployment surged by 3.2 million people, pushing the unemployment rate from 36.3% to a staggering 42.6%.
Despite these dismal results, the president continues to promise a 3% growth rate without any shift in macroeconomic policy. The National Treasury, in its latest Medium-Term Budget Policy Statement (MTBPS), projects a far more conservative growth rate of 1.7% over the next three years—highlighting the unrealistic nature of Ramaphosa’s claims.
The MTDP, which is supposedly the cornerstone of the GNU’s economic revival plan, offers nothing new. It is simply the same neoliberal agenda repackaged: same wine in a new cup. Even if the optimistic 3% growth target were achieved, it would fall woefully short of addressing the country’s unemployment crisis. To meaningfully reduce unemployment, South Africa needs sustained growth rates of at least 5% per year.
President Ramaphosa’s lofty proclamations at SONA, therefore, ring hollow. His government will not resolve the crises of unemployment, poverty, and inequality unless there is a fundamental shift in economic policy.
Reducing Poverty and Tackling the High Cost of Living
Reducing poverty and addressing the skyrocketing cost of living requires two fundamental shifts:
- Job creation through industrial expansion — especially in manufacturing.
- Reforming monetary policy to prioritize economic development over inflation targeting.
However, in a country where private capital consistently refuses to invest—as evidenced by chronically low gross capital formation and declining purchasing managers’ indices—the state cannot expect economic growth while simultaneously cutting public spending to chase budget surpluses. Instead, the government must increase investment in public infrastructure and human capital.
SAFTU has long championed infrastructure-led development as a cornerstone of economic revival. However, rather than ramping up public investment, the GNU continues to cling to failed policies aimed at enticing private capital through tax breaks, de-risking strategies, and other incentives. This approach, rooted in the doctrine of creating a “business-friendly” environment, has been a catastrophic failure. Since its adoption in 1996, poverty levels have soared, inequality has deepened, and the working-class majority can barely afford basic necessities.
Building a Capable, Ethical, and Developmental State
It is impossible to build a capable and ethical state while austerity remains the cornerstone of government fiscal policy. The systematic underfunding of critical departments such as health, education, policing, and home affairs has crippled service delivery and undermined the state’s capacity.
The Treasury’s commitment to reducing the budget deficit from 4.75% of GDP to 3.4% by 2027/2028, alongside efforts to achieve a primary budget surplus of 1.8%, translates into harsher budget cuts, further deterioration of public services, and deeper misery for the working class.
Moreover, a true developmental state cannot emerge through the privatisation of essential services like energy, transportation, and water, as envisioned in the MTDP. Between 2019 and 2024, public investment plummeted by 22.5%, while total investment declined by 8.9%. This has led to collapsing infrastructure, the downfall of state-owned enterprises (SOEs), and the erosion of the government’s capacity to deliver basic services.
Rather than reversing these harmful trends, the president’s Operation Vulindlela doubles down on privatisation. Ramaphosa’s claim that “we will ensure public ownership of strategic infrastructure for public benefit while finding innovative ways to attract private investment” is a smokescreen. Private capital, driven solely by profit, will undermine national development objectives. Services provided through profit-driven infrastructure inevitably exclude the working class and exacerbate inequality.
The Path Forward for the Working Class
For the working class, the outlook under the GNU is grim. Without organised resistance, the neoliberal onslaught will continue unabated, deepening poverty, unemployment, and inequality. SAFTU calls on all labour federations, community organisations, student movements, and progressive forces to unite in mass action.
We must build a broad front against austerity, privatisation, and neoliberalism. The anti-austerity demonstration in Cape Town on February 19, 2025, is the first step in this renewed struggle. We urge all South Africans to join us in the streets to push back against the savage budget cuts to be delivered by Finance Minister Enoch Godongwana.
People before profits! The time to mobilise is now.
