SA’s future hinges on Cyril’s skills

STAND: SHORT-TERM DECISIONS CRUCIAL

Growth needs foreign and domestic investment; this is only possible with policy certainty and rapid new leadership.

The State of the Nation address being postponed makes it clear that SA is seeing the final days of Jacob Zuma as president, although it may take a while before things are finalised. What’s important is that Zuma isn’t allowed to detract from the momentum that new ANC president Cyril Ramaphosa has started to build.

That momentum seems sufficient to avoid the most pressing concern: Moody’s downgrading our long-term local currency debt rating.

SA would then be excluded from Citi’s World Governance Bond Index. RMB Morgan Stanley projects a potential outflow of US $5 billion if this happened.

The party has no choice but to design an early exit strategy for Zuma. A downgrade would constrain growth and severely affect the ANC’s 2019 election prospects.

Economic growth

In November, Ramaphosa outlined an economic plan to generate jobs and economic growth and tackle inequality, which set a 3% growth target for 2018, rising to 5% by 2023.

The Reserve Bank has forecast the economy will grow by 1.4% in 2018, and 1.6% in 2019. The International Monetary Fund is even more pessimistic, forecasting 1.1% growth for 2018.

Nothing is more important for SA – and Ramaphosa as incoming president – than growth and translating it into employment creation. That, in turn, requires foreign and domestic investment, which is only possible with policy certainty and rapid movement to a new leadership. It also requires a positive partnership with the private sector.

Assuming Zuma’s exit is imminent, serious consideration needs to be given to the team that Ramaphosa must put in place to help him achieve the economic turnaround he envisages.

Next steps

SA has a cabinet which is double the size required. A large number of the current cabinet shouldn’t be considered for inclusion under a Ramaphosa administration.

The most important post is the minister of finance. As former finance minister Nhlanhla Nene seems to have moved on, it’s likely that either Pravin Gordhan or his former deputy, Mcbesi Jonas, will be invited back.

Ramaphosa must turn his narrow victory into a positive outcome and convince non-voting ANC supporters to return to the fold in 2019.

It will also depend on legal processes – such as the various probes into corruption and state capture – to strip out the internal contradictions within the ANC’s top leadership.

A more positive party future requires the ANC to rapidly rediscover its unity, although this seems unlikely in the short term.

Ramaphosa has been dealt a weak hand but has proven to be a consummate strategist. The next few days and weeks will be crucial and are likely to determine SA’s future for several years to come.

Jakkie Cilliers is chair of the board of trustees and head of African futures and innovation at the Institute for Security Studies.

This article was originally published on The Conversation and has been edited.