How new is Cyril’s New Deal?
● Late in his campaign, Deputy President Cyril Ramaphosa unveiled a New Deal for the economy. It is derived from the National Development Plan and differs substantially from the radical economic transformation of his fellow candidate, Nkosazana DlaminiZuma. If they sound like the policies pursued by former finance minister Pravin Gordhan, they are. Gordhan has led and helped shape the economic planks of Ramaphosa’s economics ideas.
Ramaphosa’s New Deal:
Is based on the idea of a social compact entered into by the government, business, labour and civil society. Radical economic transformation is state-led;
Aims to create a million jobs in five years. This should be in manufacturing through the right mix of special economic zones, tax and other reforms, incentives and small and medium enterprise development;
Includes targeted growth and investment: 3% growth by 2018 and 5% by 2023. It aims to restore business confidence;
Puts SMEs at the centre of policies and aims to accelerate land distribution and improve land productivity;
Aims to maintain fiscal discipline, cut debt servicing costs, and avoid “external creditors” imposing conditions that limit policy options;
Accelerates the transfer of ownership and control of the economy to black South Africans. Explores more effective and sustainable models of black economic empowerment through the participation of communities, entrepreneurs and workers; Deconcentrates the economy;
Improves the quality of education;
Boosts spending on critical infrastructure over the next five years to R1.5-trillion using private sector expertise;
Restores state-owned enterprises as drivers of growth and aims to appoint “skilled” and “incorruptible” boards and executives at strategic SOEs; and
Pledges to confront corruption and state capture through a judicial commission of inquiry.
The New Deal marks continuity with long-standing ANC policies, but it has run into headwinds. It differs, in substantial ways, from the party’s policy of radical socioeconomic transformation adopted at the ANC’s policy conference in June.
Radical economic transformation is a popular rhetoric with the ANC rank and file. Because the largest numbers of ANC delegates come from the country’s poorest provinces, the politics of poverty will harden economic positions as the conference gets into gear.