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State of the Nation Address highlights

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26 Feb 2013

In his State of the Nation Address, President Jacob Zuma stated five priorities namely education, health, the fight against crime, creating decent work as well as rural development and land reform.

In his State of the Nation Address, President Jacob Zuma stated five priorities namely education, health, the fight against crime, creating decent work as well as rural development and land reform.

By the end of March this year, starting from 2009, government will have spent about R860 billion on infrastructure with various projects being implemented around the country, he said.

Zuma pointed to the construction of the first phase of the Mokolo and Crocodile River Water Augmentation set to provide part of the water required for the Matimba and the Medupi power stations.

The construction of the bulk water distribution system for the De Hoop Dam began in October 2012, to supply water to the Greater Sekhukhune, Waterberg and Capricorn district municipalities.

“We have to shift the transportation of coal from road to rail in Mpumalanga, in order to protect the provincial roads and thus the construction of the Majuba Rail coal line will begin soon,” he said.

He also pointed out that government would improve the movement of goods and economic integration through a Durban-Free State-Gauteng logistics and industrial corridor and this means a City Deep inland terminal in Gauteng will be constructed.

Government has also bought land for the development of a new dug-out port at the Old Durban airport.

He noted that government has signed contracts to the value of R47 billion in the renewable energy programme, which involves 28 projects in wind, solar and small hydro technologies, to be developed in the Eastern Cape, Western Cape, Northern Cape and in the Free State.

“We established an R800 million national green fund last year. 

“To date, over R400 million investments in green economy projects has already been approved for municipalities, other organs of state, community organisations and the private sector across all provinces,” said Zuma.

Zuma said in SONA 2012, government raised the issue of the gap market, the people who earn too much to qualify for an RDP house and too little for a bank mortgage bond.

Things that could help improve this process include shortening the time it takes to finalise a claim and In this government will now pursue the ‘just and equitable’ principle for compensation, as set out in the Constitution instead of the ‘willing buyer, willing seller’ principle, which forces the state to pay more for land than the actual value.

From April 2012 to December 2012, provincial departments committed a budget of R126 million of the Human Settlements Development Grant for this programme, known as the Finance Linked Individual Subsidy programme.

The money is being used through the National Housing Finance Corporation, which has been appointed to deliver houses to people within the Gap market in twelve registered projects.

A total of R70 million of this amount has been used to date with projects that include Walmer Link in the Eastern Cape, Lady Selbourne, Nelmapius, Bohlabela Borwa, Cosmo City and Fleurhof in Gauteng, Intabazwe Corridor Housing in the Free State and Seraleng in North West.

He revealed that June marks the centenary of the 1913 Land Act which turned black people into wanderers, labourers and pariahs in their own land.

“The land question is a highly emotive matter and we need to resolve it amicably within the framework of the Constitution and the law.”

Although since 1994, government has been addressing the land reform problem through restitution, redistribution and tenure reform, redistribution target will not be reached.

Things that could help improve this process include shortening the time it takes to finalise a claim and in this government will now pursue the ‘just and equitable’ principle for compensation, as set out in the Constitution instead of the ‘willing buyer, willing seller’ principle, which forces the state to  pay more for land than the actual value.

Secondly there are proposed amendments to the Restitution of Land Rights Act, 1994 in order to provide for the re-opening of the lodgement of restitution claims, by people who missed the deadline of 31 December 1998.

Also to be explored, are exceptions to the June 1913 cut-off date to accommodate claims by the descendants of the Khoi and San as well as heritage sites and historical landmarks, said Zuma.

Going forward, government will provide adequate post-settlement support to new landowners so that land continues to be productive and also provide better incentives for commercial farmers that are willing and capable of mentoring smallholder farmers.

“Another challenge we have faced is the preference for money instead of land by some claimants, which also does not help us to change land ownership patterns,” he said.

Commenting on SONA, Adrian Goslett, chief executive officer of RE/MAX of Southern Africa says there is no doubt that investment in infrastructure will assist in boosting certain areas.

A total of R70 million of this amount has been used to date with projects that include Walmer Link in the Eastern Cape, Lady Selbourne, Nelmapius, Bohlabela Borwa, Cosmo City and Fleurhof in Gauteng, Intabazwe Corridor Housing in the Free State and Seraleng in North West.

For example, he says the vast amount of electrical transmission lines that were laid down will improve power supplies to economic hubs around the country, as well as bring power to rural areas that did not previously have access to electricity.

“It is also remarkable that the extension of basic services through the infrastructure programme has meant that approximately 200 000 more households now have electricity and 315 000 solar water geyser were provided to poor households that are now able to have hot running water.”

Approximately 85 percent of homes now have access to electricity and nine out of ten households have access to water and these have been basic needs that many South Africans had previously gone without, he points out.

He says it will be interesting to see what happens with the hotly debated land reform principles and policies the government is proposing within its prioritisation of land reform, which includes a move away from the ‘willing buyer willing seller’ process and includes possible limitations on foreign land ownership

“It is currently unclear as to how the announcement on foreign nationals owning land in South Africa will impact the property market.”

Goslett says no clarification has been given as to whether this restriction relates to state-owned or privately owned land, and whether it relates to just agricultural land or if it will be implemented across the board.

“If this proposed limitation of foreign ownership relates only to state-owned rural land, it will have far less effect on the market than if it refers to property in general.”

Currently only about 1 percent of South African property is owned by foreign nationals and less than 5 percent of all property sale transactions in South Africa are concluded with buyers from outside our borders. 

The large majority of buyers in the residential property market are from South Africa, and even during the property boom period, foreign buyers only accounted for approximately 6 percent of the market share, according to Goslett.

As expected, Zuma’s State of the Nation Address focused on the National Development Plan (NDP) and its triple aims of reducing unemployment and inequality and eliminating poverty, says Annabel Bishop, Investec chief economist.

This underscores the support given to the NDP at the ANC’s recent elective conference with the President detailing that “all will have water, electricity, sanitation, jobs, housing, public transport, adequate nutrition, education, social protection, quality healthcare, recreation and a clean environment” by 2030,  she says.

Bishop points out that Zuma mentioned that the business sector has identified obstacles preventing the achievement of the NDP’s aims and that government will engage all sectors in pursuit of the objectives.

“However, the latter is a vague statement with no details on the actions needed, or specific support for businesses’ concerns, but the President is likely mindful of the sensitivities of the ANC’s partners in the tri-partite alliance,” she says. – Denise Mhlanga

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