SONA 2022

State of the Nation Address (SONA)

There were some interesting high-level announcements in February - some from the President's SONA, and a very topical announcement about Renewable Energy and COCT's effort to make Cape Town free of load shedding.

The property sector is driven by sentiment, the economy, and confidence in the economy.

Some highlights mentioned in SONA:

• CORRUPTION - The president spoke to corruption within different sectors in the country, commending the Commission into State Capture for its work. The final state capture report is due to reach the president later this year. 
  The first two reports so far showed that there was "indeed state capture". 
  The President said that 45 matters to the value of R2.1 billion in total is now with the Special Tribunal. i.e., ACCOUNTABILITY!

• CANNABIS - The President said the government would be looking to ease policies to help the hemp and cannabis sectors grow in South Africa (new jobs/industry/economy)

• ESKOM - The President outlined his plans to generate more power.

• RED TAPE - Ramaphosa said the government would be looking at ways to cut the red tape that often hamstrings businesses in South Africa.

As always, the proof is in the pudding, so let's see if the Government can implement its plan, and not just "talk the talk".

Another important development announced is about CoCT and its buying power from independent power producers (and not only from Eskom). 

Loadshedding in 2020 was estimated to cost the Western Cape Economy R75 million per stage, per day. (500M/day for SA.)

This means that this latest Stage 2 load shedding is estimated to cost our provincial economy R150 million per day.

The City of Cape Town uses 2,000MW per day.

Cape Town mayor Geordin Hill-Lewis announced on 23 February 2022 that the city has opened tenders for up to 300MW of renewable energy projects from independent power producers (IPPs).

This is part of efforts to reduce the city's reliance on Eskom, eliminate load shedding, and become the country's FIRST load-shedding-free City!!!!!!

The city plans to have the projects, mostly solar, constructed and connected in the next 40 to 50 months (so 4 years).

The more it can secure power from independent producers the less reliant it will be on Eskom and can reduce load shedding over time.

So, in a nutshell, the City of Cape Town's statement of intent to reduce load-shedding is good for the Western Cape economy, and as stated before, property is driven by sentiment and likely to be positively affected.

Less downtime, more economic growth, more jobs, more stability, etc, etc.

This probably means even more semigration from upcountry as our municipalities are seemingly just better to run.

As always though, the proof is in the pudding. If this can be implemented, effectively (and without drama/corruption scandals) it is a good thing for the Western Cape and naturally for the property market.