CAPE TOWN - South Africa must fix its strained public finances and procure more renewable energy quickly to address a power crisis, President Cyril Ramaphosa said.
Ramaphosa acknowledged in an annual State of the Nation Address to Parliament that growth had stalled, exacerbating high levels of unemployment and increasing hardship for millions of citizens.
But the speech was short on specifics or timeframes that would have reassured investors that his government had a clear plan to solve the deep-seated structural problems in Africa's most industrialised economy.
"Low levels of growth mean we are not generating enough revenue to meet our expenses, our debt is heading towards unsustainable levels, and spending is misdirected," Ramaphosa said.
"We cannot continue along this path. Nor can we afford to stand still."
Ramaphosa said that government had met trade unions on ways to contain the public sector wage bill -- a key worry for ratings agencies -- but did not elaborate.
He said South Africa would set up a sovereign wealth fund to protect its endowments and a state bank to broaden access to financial services.
Analysts have reacted sceptically in the past to the idea of South Africa establishing a sovereign fund, since it does not have large oil and gas revenues that could be easily harnessed.
The country's mining sector is in decline and is controlled by private companies.
Ramaphosa said that his government would shortly issue determinations to procure more power and increase generating capacity outside struggling power utility Eskom.