Reacting to President Cyril Ramaphosa's State of the nation address, the Congress of South African Trade Unions (Cosatu) on Friday warned the government not to outsource its developmental obligations to the private sector.

Cosatu said Ramaphosa was right to acknowledge the detrimental effect spiraling public debt had on all sectors of the population, but that the state of the economy could not be blamed solely on corruption.

"The current slowdown in the South African economy is indeed partly to corruption but also to a large extent, as a result of mismanagement of the economy by the policymakers and decision-makers who have only focused on the failed neo-liberal policies," the labour federation aligned to the ruling African National Congress (ANC) said.  

It welcomed Ramaphosa's statement that his investment drive had yielded pledges of around R664-billion that will be poured into several sectors of the economy but said foreign direct investment was "not the solution to everything".

"The over-reliance on the private sector investment has left the economy vulnerable to the irrationalities of investor confidence," the trade union federation said. 

"A situation where the state plays an increasing role in the investment process is warranted, especially given the massive socio-economic challenges and household vulnerabilities that we face."

Cosatu gave fulsome support to Ramaphosa's announcement that government departments will in future be forced to spend one per cent of their budgets on employment creation targeting young people. 

The measure is aimed at tackling youth unemployment of a staggering 50 per cent.

"This is long overdue and it represents the business unusual that we have been talking about," Cosatu said.