South Africa: Can Ramaphosa sell his plan to a skeptical nation?
President Ramaphosa is gearing up to deliver the State of the Nation (SONA) address in Parliament.
In a previous outing South Africa’s president Cyril Ramaphosa coined the term ‘New Dawn’ – and rallied support around his change agenda.
The shine has come off however, and the SONA will reflect it: no gala dinner, no expensive gatherings this year.
And the intray is full…
First the parlous state of the economy.
- GDP sharply contracted by 3.2% in the first three months of the year, with unemployment up to 27.6%
- The fate of poorly-managed state-owned enterprises (SOEs) like power utility Eskom and South African Airlines (SAA) is central to any Ramaphosa sparked revival
- Big announcements over the breakup of Eskom have not been followed through with concrete action, and the SAA CEO Vuyani Jarana resigned in early June over “funding uncertainty and slow decision-making processes“.
“He should be in crisis mode. The country is in crisis. Things are getting worse, fast. Our finances are getting worse … look at the tax receipts. The liabilities of Eskom are hundreds of billions of rands. We need a crisis response”, says Steven Nathan, the founder of asset manager 10X Investments.
Foreign investors are worried about systemic issues which make them rethink holding South African debt, for example:
- A recently-announced plan from the ANC to force pension funds to invest in a prescribed list of assets; which could be a way to plug holes in leaky SOE finances according to the Institute of Race Relations.
- Scattergun pronouncements from the ANC about the independence of the Central Bank, currently privately-run.
- Constitutional amendments over expropriation of land without compensation.
But does the president have the latitude to act, whatever the promises of SONA may be?
The recent imposition of candidates for important committee chairs from the Zuma-supporting wing of the ANC speaks volumes.
- “This saw former state security minister Bongani Bongo – a staunch Zuma loyalist accused of bribing a parliamentary official who was in charge of the Eskom inquiry – appointed chairperson of the home affairs committee”, writes The Sowetan.
- “Another Zuma supporter, former transport minister Joe Maswanganyi, has been appointed to chair the powerful standing committee on finance, while former deputy finance minister and Zuma man Sifiso Buthelezi has been appointed to lead the appropriations committee.”
These chairs have the ability to change legislation.
Some however point to the Ramaphosa long game: using institutions to deal with the old corrupt regime.
Law enforcement bodies run down during Zuma’s era have been rebuilt and have new heads – from the National Prosecuting Authority (NPA), the South African Revenue Service (SARS) to the Hawks and the police’s Crime Intelligence Division.
- “The Zondo State Capture commission is publicly hearing testimony on corruption and politically motivated dodgy dealings, as is the inquiry into the Public Investment Corporation (PIC), the government-owned asset manager of R2trn ($140.6bn) of workers’ social savings and pensions”, writes the Daily Maverick.
If those structures start doing their job, the optimists believe the Zuma-era may be wrapped up sooner than anticipated.
Bottom line: For everyone else, Ramaphosa has a tough job to convince South Africans that there is a plan to turn the country around.