Cyril’s stimulus plans need buy-in from all
Ranjeni Munusamy Insight
President Cyril Ramaphosa having a terrific year.
It started with the ANC anniversary celebrations in East London in January, where he took charge of the party after his election as its leader in December.
He laid out his game plan, called for unity among the ANC faithful and made it clear the country would be changing course. There was no doubt he was “the coming man”.
A month later, Jacob Zuma’s power was decimated. After trying desperately to hold on to the presidency, he made a clumsy, undignified exit from office.
Ramaphosa became SA’s fifth president on February 15 and, a day later he delivered his first State of the Nation Address.
The country embraced its new president and his message of hope and renewal.
Since then the sands have been shifting. Zuma was charged and is facing trial for corruption, the Guptas fled the country, Tom Moyane was suspended as the head of the South African Revenue Service (Sars) and faced disciplinary procedures, Shaun Abrahams left the National Prosecuting Authority after the Constitutional Court found his appointment uncon- is stitutional, Godfrey Lebeya was appointed head of the Hawks and minister Pravin Gordhan undertook a major clean-up campaign in state-owned enterprises. The Zondo commission began piecing together the state capture project, while the Nugent commission has unravelled Moyane’s fiefdom at Sars.
Ramaphosa, meanwhile, embarked on a massive investment drive to turn around the country’s economic prospects, hosted the Brics summit, with much aplomb, and made his first address to the United Nations General Assembly.
Last week, more than 1,000 people gathered for the presidential investment summit where Ramaphosa was the man of the moment.
It brought to a climax the work of his special envoys and his own efforts to pump up foreign and domestic investment to the country.
The summit rounded off with major corporations lining up to announce investment pledges, totalling R290-billion. The president sat on stage wearing the delighted smile of a child receiving presents at his birthday party. The pledges were dressed up to look like new investment initiatives created especially to respond to Ramaphosa’s economic turnaround campaign. Most were not.
There were some new private sector projects, but the announcements included public development money from international development agencies, new lending from the Brics New Development Bank, as well as intended spending by the public and private sector.
The event closed with a dinner addressed by the iconic cofounder of Chinese tech giant Alibaba, Jack Ma, who spoke of his bromance with the South African president.
“In five minutes I fell in love with this guy,” said the 10th richest man in the world.
This week, Ramaphosa has been in Berlin, where he held talks with Chancellor Angela Merkel and attended the G20 Compact with Africa Conference and the G20 Investment Summit.
Ramaphosa faced one major hurdle earlier last month when the finance minister, Nhlanhla Nene, offered his resignation after admitting to the Zondo commission that he had held a series of meetings with the Guptas when he was previously in the finance ministry.
The crisis abated in a few days when Ramaphosa appointed the widely respected Tito Mboweni to the portfolio.
So it all seems to be coming up roses for Ramaphosa, who appears to be cantering confidently towards the sixth democratic elections next year, towing along the bedraggled ANC. But here’s the problem: the rest of South Africa is not having as fabulous a time as the president.
There is positive sentiment, yes, and people have generally welcomed the initiatives he has undertaken to turn around the country’s fortunes.
But people’s lives have become more difficult, particularly through the VAT and fuel hikes, and essentials such as transport, electricity and data are prohibitively expensive.
On Tuesday, Stats SA said the country’s unemployment rate rose to 27.5% in the third quarter, up 0.3%.
In the context of a recession and international ratings agencies still cautious about SA, the country remains in a dire state.
One thing that was not raised at all at the investment summit was the political situation and whether the investor community can be assured of stability after a wild ride over the past few years. It was not brought up, probably because nobody can really answer the question as next year’s election outcome is rather unpredictable.
Even with the high-level changes in the country, it is difficult to test political sentiment on the ground with so much disenchantment over the cost of living, levels of corruption and the lack of consequences for the devastation caused under Zuma.
What happens if the ANC does not win the majority in the election or if the fightback cam- paign in the ANC against Ramaphosa?
What guarantees can Ramaphosa give that investing in SA is a safe bet and that he will remain riding high next year?
Some of the business leaders attending last week’s summit say they did not want to spoil the party by asking the hard questions.
While the changes to the visa regime and the clean-up in SOEs have been welcomed, there remain massive impediments to investment that have not been addressed, including labour, electricity and tax costs. Nobody really expected that Ramaphosa would work miracles in just eight months, and there has to be acknowledgement of the progress made compared with where we were a year ago when phase two of the Zuma era was a very real prospect.
But for SA’s recovery process to really advance, there needs to be tangible, ground-level impact, mainly through job creation and improvement in the quality of people’s lives.
Change needs to be felt, not observed through the wonderful moments in the life of our president. succeeds
There remain impediments to investment that have not been addressed