Interest rates are falling, and the rand is loving it. Equities and bonds are enjoying the party, too. It’s a great season.
With Christmas around the corner, consumer spending will tick up nicely. The ratings agencies are clapping, too. This beautiful picture is the opposite of what could have happened after the May 29 elections, as South Africa negotiated a forked road. There was the option of going left or right, whatever a coalition with the EFF and MK represents.
President Cyril Ramaphosa must feel like a genius, having led the ANC to the government of national unity (GNU) option without much internal bloodletting. He can afford to feel smug. His legacy so far is that of a man who helped South Africa avoid the worst options, instead of a man who took positive action to move the country forward.
Because of his penchant for speaking out of both sides of his mouth, he might need help to verbalise his political dream for South Africa. He has presented himself as a party man who believes in the supremacy of the ANC. Yet, in his reign, the political environment has changed as though there has been a deliberate attempt to reform South African politics.
What was previously unthinkable, co-governance with the DA at the national level, has been achieved with great skill in the creation of the ruse of the GNU. Ultimately, the GNU is an attempt to sugarcoat a coalition with the DA, which may have been hard to sell within the ANC.
The economic outlook is not that rosy. Some bank economists think South Africa could reach 2% economic growth in a year or two. Ratings agency Fitch believes the country will average 1% in the next five years. These numbers are better than nothing, and will go a long way in helping the business sector get better results.
However, they may not dent rising unemployment, which remains stubbornly in the 30s. The worst feature of our unemployment is the youth cohort, which in cities like Nelson Mandela Bay, has been above 50% for a decade now.
Our light at the end of the tunnel comes from energy sector reforms and logistics infrastructure improvement.
The GNU is enjoying a honeymoon that may last another year. This is a period to put the pedal to the reforms required.
Ronak Gopaldas, a Cape Town-based Signal Risk director, expects the coalition to remain intact until the local government elections in 2026 because “falling apart before then would result in mutual destruction and the erosion of public goodwill”.
He says the ideological differences between the coalition partners will become more apparent after the brief honeymoon. “These tensions will continue to resurface periodically, with each party trying to assert its authority and manage perceptions for its base.”
The GNU is enjoying a honeymoon that may last another year. This is a period to put the pedal to the reforms required
The project management team in Ramaphosa’s office has 17 priority areas, including local government turbocharging and water infrastructure revitalisation. That is good, as big a number as 17 is. What is required at a political level is for the cabinet to whittle the number down to three or five priorities and go for broke in achieving its targets.
Failing to capitalise on the honeymoon means not much will have been achieved by the time the silly political season kicks in, bringing with it various storms. Both the DA and the ANC are candidates for bruising succession battles in the coming years. The GNU could become a proxy in these battles, with the threat of divorce ever-present.
Gains from the financial markets are easy to reverse. It takes a single computer move for a trader to sell the rand or South African stocks, as happened during Ramaphosa’s first term in office. When his time is over, we will have a crisis worse than the one we had under his lacklustre leadership.
Among the professional politicians across all parties, no one is worthy of succeeding him.
We will be scratching our heads and looking for non-existent messiahs. And the storms of years of youth unemployment may have snowballed into something bigger. On the one hand, Ramaphosa will have helped us avert the worst, but through his going nowhere slowly style. At the same time, he is just a placeholder to be replaced by another version of the worst when the time comes.
Mkokeli is lead partner at public affairs consultancy Mkokeli Advisory
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