Grasping the nettle of corruption will earn Ramaphosa points at Davos

In Davos, at the start of every year for the past 49, a country’s president and his band of “supporting” captains of industry have been given the chance to strut their stuff at the World Economic Forum (WEF) for four days. If used well, and especially if you have a fresh story to sell — such as a new administration — the week offers a chance to shape sentiment for the calendar year. Last year’s big star was a certain Donald Trump. This year, because of the domestic fallout over his ill-fated build-the-wall campaign, there was no US attendance. Though not receiving as much of a star billing as the US’s first citizen, SA and Zimbabwe had some developments to pitch after a year of monumental political changes.

Last year was Cyril Ramaphosa’s first turn at the WEF as an incoming state president as he pledged to reclaim SA’s title as a promising African country by embarking on the arduous journey of dealing with the corruption tag that has dogged the ANC for the previous decade. It was a chance to allay fears that the country, much like emergingmarket peers such as Venezuela, would venture deeper into simplistic, populist solutions to fundamental economic questions centred on rising inequality.

Zimbabwe had the simpler task of selling a future without Robert Mugabe at the helm. It’s almost customary in the corporate world that, when a new board is appointed at a struggling firm, the weaknesses of the previous leaders are highlighted during initial engagements with stakeholders. The mistakes of the predecessors are dissected and pored over and their unrealistic ambitions blasted. This buys new management some time to get a handle on the ship they’ve just begun to steer. In this period, earnings are generally low or, in the case of a country, growth is anaemic.

This is what Ramaphosa’s ANC and our neighbours to the north have been doing on the global stage.

And this week was a chance for investors to read their report cards.

Ramaphosa’s card shows a concerted and sometimes ruthless focus on correcting governance collapses in state-owned enterprises, SA’s biggest fiscal risks. At key institutions such as the National Prosecuting Authority and the South African Revenue Service, there have been personnel changes. Forums such as the Zondo commission on state capture and the Nugent inquiry into the tax authority have opened a rather uncomfortable window on the rot in the ANC, not least of all the explosive testimony of Angelo Agrizzi over the past couple of weeks.

Though the party has maintained that such scrutiny is in no way a probe into how it operates, it has given insight into how it has operated for the past decade at least.

In an election year, some would call it suicidal for a governing party to air as much of its dirty laundry as the ANC has inadvertently done. But, given opposition missteps such as the resignation of the DA’s policy head just weeks before the party’s manifesto launch, the growing exposure of the governing party’s malfeasance may not be as detrimental at the polls as it should be.

We’ll only know just how damaging in May, but macroeconomic indicators in a month drenched with corruption scandals centred on the party have been surprisingly good.

The rand’s strengthening more than 5% this month helped to lower inflation as fuel prices fell. Ramaphosa this week said direct foreign investment into SA increased more than 440% last year, from $1.3bn (R17.7bn) to $7.1bn.

The case of Zimbabwe couldn’t be more different as a world without Mugabe proves difficult to navigate. The new powers in that country have tried to inspire hope of change while still seeking to protect the status quo. Their people and the markets, whose agendas are set at forums such as the one in Davos this week, are not inspired. There was no new story for President Emmerson Mnangagwa to sell and it was fitting that, much like Trump, domestic woes kept him home.

In establishing commissions such as the Zondo inquiry, SA is doing something that not many countries would attempt in an election year. To the governing party’s possible own detriment, it is meeting its own promises so far.

SA is doing something not many would attempt in an election year