President Cyril Ramaphosa: Annual Address to the National Council of Provinces

Chairperson of the National Council of Provinces, Ms Refilwe Mtshweni-Tsipane,
Deputy Chairperson of the National Council of Provinces, Mr Les Govender,
All Premiers present,
NCOP Delegates,
Representatives of local government,
Fellow South Africans,

It has been almost six months since South Africans went to the polls.

Through their votes, the people of South Africa gave their elected representatives a firm mandate to improve their living conditions and their prospects for a better life.

Since then, we have worked to give effect to that mandate.

Guided by the will of the people, we established a Government of National Unity consisting of 10 parties from across the political spectrum.

While these parties differ on many issues, they have committed themselves to inclusive economic growth and accelerated job creation.

They have committed themselves to reduce poverty and tackle the high cost of living.

And, to advance these priorities, the parties to the Government of National Unity have committed themselves to build a capable, ethical and developmental state.

The decision by the NCOP to dedicate this debate to focus on our collective efforts to reduce poverty and tackle the high cost of living is a worthy and timely response to the mandate of the people.

As South Africa marks 30 years of democracy, we acknowledge the great progress we have made in lifting millions of South Africans out of absolute poverty.

In 1993, 71 percent of South Africans lived in poverty. 

By 2010, the poverty rate had dropped to 61 percent.

Ten years later, in 2020, it was at 56 percent.

Yet people’s lived experiences confirm the persistence of poverty and inequality.

The daily struggle to meet the basic necessities of life – food, water, electricity and transport – is a reality for many families across the country.

Even today, nearly a quarter of South Africa’s people experience food poverty.

We know that poverty in South Africa has deep roots. It is the inevitable consequence of centuries of colonial and apartheid humiliation, dispossession and exclusion.

Apartheid was designed to create islands of privilege in a sea of inequality, poverty and despair. 

These are the divisions of the past that, through our Constitution, we have made a commitment to heal.

In the preamble to our Constitution, we have vowed to improve the quality of life of all citizens and free the potential of each person.

The end of poverty and inequality in South Africa therefore requires nothing less than the fundamental social and economic transformation of our country.

Over the course of the last 30 years, we have set out on the path of transformation.

We have made progress on many fronts. But we have also confronted severe constraints and challenges to our development.

Some of these constraints and challenges have arisen from beyond our shores. 

Some of these challenges include a series of global financial crises, a devastating global pandemic, geopolitical rivalry and the catastrophic effects of climate change.

But many of these constraints and challenges have arisen at home. These include state capture and corruption, policy missteps, service delivery failures and civil unrest.

As we work to put these challenges behind us, our focus is on the actions we must take – boldly and with urgency – to implement our electoral mandate.

Our actions must make a real difference in people’s lives now.

Our actions must also build an inclusive economy that will continue to reduce poverty into the future – and ultimately eradicate it.

Since the advent of democracy, we have dedicated great effort and resources towards alleviating poverty and reducing inequality. 

As we work to rebuild the economy, to create more employment and open opportunities for emerging businesses, we continue to assist the poorest and most vulnerable in our society. 

We provide various forms of support and protection through the ‘social wage’.

This includes the provision of social grants, free basic services, health care, basic education, higher education, social housing and transport. 

When debt servicing costs are excluded, around 60 percent of government’s budget is spent on the social wage. 

The funds we spend on social support and protection are not wasted. They make a real difference in people’s lives and improve their prospects for a better future.

The results of Census 2022 show the impact of these social policies. 

Households living in formal houses increased to 89 percent in 2022, a huge rise from 65 percent in 1996. 

Eight out of 10 South Africans now have access to piped water at home or in their yards.

Ninety percent of people have access to electricity, up from 58 percent in 1996.

A vital part of the effort to reduce the cost of living is the provision of a free basic minimum of services to indigent households.

Through this programme, millions of indigent people have been able to access basic needs like electricity and water.

Yet we know that this programme is not reaching all the people it should.

It is estimated, for example, that around 10 million poor households qualify for free basic electricity, but it only reaches about 2.3 million households.

While the provision of such services to indigent households is funded by the national fiscus, these resources are either poorly managed by municipalities or they are misdirected to other council expenditures.

This is one instance where the weaknesses in local government have a direct bearing on the quality of life of the poorest in our society. 

It is one of the reasons that we are working to ensure that we have effective local government as part of our efforts to build a capable state.

Social grants remain a lifeline for millions of people, particularly children, the elderly and persons with disabilities.

The introduction of the SRD grant during the Covid-19 pandemic has provided much needed relief to as many as 11 million unemployed people at its peak.

Today, around half of all households in South Africa benefit from social grants.

Studies have shown that the Child Support Grant has a positive impact on children’s nutrition, health, school attendance and educational outcomes.

Although there are some weaknesses in the system, it is impressive that the state provides direct financial support to 28 million beneficiaries every month without fail.

But we must also recognise that this is not a desirable nor a sustainable situation.

While there will always be people who need support – such as the elderly, children and persons with disabilities – our aim must be to steadily move as many social grant recipients as possible into sustainable livelihoods.

Food is among the most basic of human needs.

Yet, nearly a quarter of households consider their access to food as inadequate or severely inadequate.

While the steep rise in food inflation since the Covid pandemic has eased over the last few months, consumers are yet to feel the effects in their pockets.

Among the measures to ensure that all South Africans have affordable access to sufficient food, government is looking at whether the basket of food items that is exempted from VAT could be expanded to include more basic products. 

Another important area is the expansion of the country’s agricultural output.

This requires more effective land redistribution and the provision of the support needed by beneficiaries to work the land.

We have seen how financial support to small-scale farmers in recent years has significantly increased the cultivation of land.

Many South Africans get their food from spaza shops and informal traders.

These outlets are an important part of township and rural economies. They provide residents with convenience and value.

However, the recent spate of food-borne illnesses has highlighted the several risks associated with these enterprises.

The tragic deaths of a number of children after eating food from some of these outlets requires urgent and decisive action to prevent the contamination of food by harmful substances, particularly pesticides that are being sold unlawfully.

Since we announced a range of measures two weeks ago, multi-disciplinary teams have been conducting inspections of spaza shops across the country.

Nearly 200,000 spaza shops have been visited. 

More than 1,000 spaza shops, supermarkets and warehouses have been closed down.

Large quantities of goods have been confiscated and numerous fines have been issued for violations of by-laws.

Poverty in South Africa is also a consequence of where people live.

Our cities and towns were designed by the apartheid planners to keep black people at a distance from the centres of economic activity and social services. 

This has created spatial inequality that we have not yet been able to overcome.

One of the consequences of this situation is that millions of South Africans, especially the poor and working class, spend a large portion of their income on transport costs. 

Studies suggest that poor households can spend more than a third of their income on transport.

The work that has been done over the last few years to restore the key commuter train corridors to full operation is a vital part of efforts to reduce the cost of living.

Surveys by Statistics SA have shown that trains are the least expensive mode of transport in the country.

In 2020, the cost of train travel was around 40 percent less than by minibus taxi and 27 percent less than by bus.

Another challenge we have had to confront is energy poverty.

We have done well as a country: across almost all municipalities between 80 and 100 percent of households have access to electricity.

Yet we have struggled for more than a decade to produce enough electricity to meet demand, which resulted in crippling load shedding.

The cost of building new generating capacity, combined with the effects of state capture and mismanagement, has contributed to a steady rise in the cost of electricity for consumers.

Even now, NERSA is considering an application from Eskom for tariff increases that will put a further strain on households and businesses. 

It is vital that we settle on a tariff path that enables Eskom to achieve financial sustainability while not placing an undue burden on consumers of electricity.

We have embarked on far-reaching reforms of the electricity sector that will establish a competitive electricity market. 

This will improve energy security and lower the cost of electricity.

Improving access to quality health care is central to our efforts to tackle poverty.

A healthier nation is a more productive nation. 

As a government, we have prioritised the strengthening of primary healthcare. 

This is an important part of the progressive implementation of the National Health Insurance, which will give all South Africans equal access to quality health care regardless of their ability to pay.

The work underway to implement the NHI includes the upgrading and expansion of public health facilities and the training of qualified and capable personnel.

Education is ultimately the most powerful instrument we have to end poverty.

By investing in the skills and capabilities of young people, we will be able to break the cycle of poverty that is handed down from one generation to the next.

We have done much to make education accessible and affordable for all, including through no-fee schools and funding for tertiary students from poor and working class backgrounds. 

Almost 90 percent of all learners in the public education system attend no-fee schools.

The number of students benefiting from NSFAS rose from around 40,000 in the early years of democracy to over 780,000 last year.

We are now focused on achieving universal access for all children to early childhood development facilities. This is essential to prepare them for school and set them up to be successful in life.

In basic education, we have prioritised improvements in reading and mathematics. 

Due to our past, millions of South Africans experience asset poverty.

They do not own land or houses or other assets that can be used to raise capital, to start a business or to hand on to the next generation.

We have started to address the challenge of asset poverty through our land reform programmes and the provision of subsidised housing.

While the state has provided houses to millions of South Africans since 1994, many people do not have title deeds to these houses.

We are working to remove the backlog of title deeds for subsidised housing and reform the system of title deeds to make it more affordable and accessible.

Crime, violence and corruption make people poorer.

They make communities live in fear.

In recent years, we have focused on putting more boots on the ground through the recruitment of police personnel.

In this administration, the South African Police Service will implement a more data-driven approach to target violent crime hotspots and direct resources accordingly. 

The SAPS, through more effective policing will continue to work with communities through community policing forums to promote the role of citizens in reducing crime.

One of the most pervasive and vicious forms of crime in South Africa is the violence perpetrated by men against women and children.

Through the National Strategic Plan against Gender-Based Violence, we are strengthening the response of the criminal justice system, providing better support for survivors of gender-based violence, and reducing the vulnerability of women through improving their economic position.

We are also undertaking programs of prevention, working with men and boys in particular to address the attitudes and practices that contribute to such crimes.

On Monday, we joined people around the world in marking the start of 16 Days of Activism of no Violence against Women and Children.

We call on all South Africans to become involved and to raise awareness about this scourge and what we need to do to end gender-based violence.

Madam Chairperson,

While the number of people in employment has doubled over the last 30 years, this has not kept pace with the number of people entering the workforce each year.

More than 11 million people are currently unemployed in South Africa.

Because there can be no job creation without growth, we have placed inclusive economic growth at the centre of the work of the Government of National Unity.

We are pursuing far-reaching economic reforms to make the economy more competitive and to enable greater growth.

There is now significant momentum to our reforms in strategic network industries like electricity, water, telecommunications, rail and ports. 

In this administration, we are focusing on reforming the local government system and improving the delivery of basic services.

We are expanding investment in infrastructure.

Infrastructure investment contributes to economic growth by stimulating activity in the construction and related industries. 

It also provides the networks and facilities that allow for the production and distribution of raw materials, manufactured goods, data, electricity, water and the other essentials of a functioning economy.

We have seen the impact on people’s lives of new roads and bridges in rural areas, of new clinics and hospitals, of new schools and colleges, of water schemes and new housing projects.

Over the last four years, major projects have been completed in areas such as transport, water and sanitation, energy, human settlements and student accommodation.

Another 82 Strategic Integrated Projects, with a combined value of R437 billion are in construction.

The problem of unemployment is most severe among young people.

To address this, the government established the SAYouth.mobi platform for young people to find opportunities for employment, training and development. 

Other initiatives include a pay-for-performance programme that links training to employment opportunities.

The revitalised National Youth Service involves young people in different fields of work social and community work.

The Presidential Employment Stimulus has created earning opportunities for more than 2 million participants. Around 84 percent of participants are young people.

The government is increasing support for small businesses and entrepreneurs across the spectrum, from informal enterprises to high growth, high-tech start-ups.

To unlock growth in informal employment, the government is working to ease restrictions on informal trading, reduce the cost of trading and expand lending to small businesses by providing guarantees and first-loss funding.

One of the pillars of our response to gender-based violence is the economic empowerment of women.

At the same time, improving the economic position of women is a critical part of reducing poverty and inequality – and unleashing the potential of our economy.

One of the initiatives to empower women is the Women Economic Assembly, which has done good work to incorporate women-owned businesses into established business value chains.

The women economic empowerment programme has now trained 10,000 women businesses to secure procurement from the government and the private sector. 

As we pursue inclusive growth, we need to be increasingly seeking opportunities elsewhere on the African continent.

As the African Continental Free Trade Area gains momentum, our companies need to expand their presence in the huge continental market that is being formed.

On Sunday, the 1st of December, South Africa will be taking over the Presidency of the G20 group of countries.

Together, these countries account for 75 percent of the world’s trade and 85 percent of global GDP.

We will use our Presidency to bring the development priorities of the African Continent and the Global South more firmly onto the agenda of the G20.

Through our G20 Presidency we will focus on the theme of ‘Solidarity, Equality and Sustainability’. 

We will call on the members of the G20 to stand in solidarity with those people who are facing hardship, poverty and conflict.

We will work to tackle inequality through fair and consistent trade rules, improved debt relief mechanisms, and increased funding for climate actions and development. 

We aim to strengthen the commitment of all countries to the achievement of the Sustainable Development Goals by 2030.

The G20 Presidency is also an opportunity to present to the world the great opportunities and experiences that South Africa has to offer.

Arising from the elections in May, the Government of National Unity has been working with other formations in society towards the convening of a National Dialogue.

The National Dialogue will encourage the participation of all South Africans, as individuals and in their various formations.

The National Dialogue will need to address the persistence of poverty, unemployment and inequality. 

The National Dialogue will seek to forge a new social compact on the action required by all members of society to achieve the vision of the National Development Plan. 

In closing, I wish to recall the words of our founding President Nelson Rolihlahla Mandela at the ‘Make Poverty History’ campaign in 2005.

He said:

“Like slavery and apartheid, poverty is not natural. It is man-made and it can be overcome and eradicated by the actions of human beings.”

There are moments when the depth of poverty in our country may lead us to despair.

Poverty, unemployment and inequality are so pervasive and so persistent that we sometimes fear we may never overcome them.

And yet, we overcame apartheid. We overcame slavery and colonialism.

Through our collective actions, we will be able to end poverty in our country.

Together, we will be able to achieve a more just, more equal society in which all South Africans share in the country’s wealth.

A society in which no one is left behind.

I thank you.