The business community and economists have called on President Cyril Ramaphosa to move with speed to consolidate economic reform and put the interests of the country first before those of his political party.
This comes after Ramaphosa was re-elected as president of the ANC for a second term.
Ramaphosa has come under intense criticism from the business community for the slow pace of economic reforms to spur growth and reduce unemployment.
Nedbank economist Isaac Matshego said Ramaphosa’s re-election was positive news for the reform and modernisation that he started during his first term. Although the pace of reform had been lacklustre, progress had been hindered by the Covid pandemic, the July 2021 unrest and instability in major state-owned enterprises and most municipalities
“Stabilising the management of the major SOEs, Eskom in particular, should be a priority above all else.”
Cas Coovadia, CEO of Business Unity South Africa (Busa), said the outcome of the ANC’s leadership contest reflected factional divisions in the party, and “this does not bode well for ongoing economic reform and policy certainty”.
“What is needed now, at least in 2023, is decisive and courageous leadership from President Ramaphosa, whose re-election we welcome. He must move with speed to consolidate economic reform, and implement critical actions in key areas of the economy,” he said.
Stabilising the management of the major SOEs, Eskom in particular, should be a priority above all else
Ramaphosa “needs to put the national interest above the factional battles in the ANC. Busa remains clear that increased investment and inclusive growth are paramount and the only route to addressing the numerous issues in SA. We will continue holding the government to account in creating an environment for this,” he said.
Azar Jammine, director and chief economist at Econometrix, said since Ramaphosa won’t have a third term, he has nothing to lose and should accelerate structural reform.
“In particular the one area where I think he can push a little more actively is dealing with corruption, so I think there is nothing that should hold him back.
“Some may argue that he is not particularly decisive in his own right and that might not change — that we might not see an acceleration of structural reforms. That view does have some validity,” he said.
Makwe Masilela of Makwe Fund Managers expected government initiatives to be fast-tracked, especially as business had been complaining about the slow pace of reforms. The electricity supply was the most urgent priority, along with ensuring that more than R1-trillion in investment pledges was converted into actual projects.
“I will be surprised if he doesn’t become more decisive as this is his last chance to improve voters’ livelihoods, let alone leave a legacy for himself. He’s got an emphatic mandate now,” he said.
Matshego said he was “confident that the president and his cabinet will continue to demonstrate a commitment to fiscal stabilisation, addressing the infrastructure backlogs and creating a business environment that will promote investment and job creation. The pace of reforms, however, needs to be accelerated significantly,” he said.
Black Business Council (BBC) CEO Kganki Matabane said the organisation “implores the new leadership to hit the ground running”, adding that the “time for long speeches has long passed”.
The BBC urged Ramaphosa to be bold and decisive in dealing with “energy security, economic growth, record-breaking unemployment, crime, support to small, medium and micro enterprises, socioeconomic transformation, corruption, lawlessness and the myriad other issues impacting negatively on the economic climate and economic recovery”.
However, Dawie Roodt, chief economist at Efficient Group, was sceptical about prospects for getting the economy into gear after Ramaphosa’s re-election.
“I don’t think that’s going to make much of a change. I don’t think that he is going to take those very difficult political decisions because that’s not in his nature. He’s not really a strong leader. He’s a consensus-seeker trying to keep unity and keep the ANC together. It’s far more important for him than trying to fix the country.”
Roodt said there certainly was an opportunity for Ramaphosa to make changes that would get the country going again, such as strengthening his political position and reshuffling the cabinet. “ He has to cement his position — and shaking up the cabinet is the first [priority],” he said.
Jammine said while there was no question the Nasrec outcome was well received by the business community, he was concerned that Ramaphosa’s “image has taken a big knock with this Phala Phala saga. Many of the people who have supported the ANC previously purely on the Ramaphosa factor might no longer do so. There has clearly been some damage to the ANC’s chances of getting a majority in the 2024 election as a result of Phala Phala.”
Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.
Please read our Comment Policy before commenting.