Brightening mood puts a wind behind the boss
There is a queue around the block to be first with a plausible prediction of when President Cyril Ramaphosa’s foes are going to topple him, and I fear for the people in it. Just this week Ramaphosa easily saw off opposition from within his own party to a vote in parliament on whether to open an inquiry into the fitness of one of his tormentors, the public protector, to hold office.
And the economic news is suddenly rather good. There’s a positive new investment mood in the country. Big construction and engineering companies like WBHO and Murray & Roberts are reporting record-sized order books as infrastructure orders “roll in”.
Bankers like FirstRand CEO Alan Pullinger are quoted confirming that the economic recovery post-Covid waves one and two is “much better than expected”. Freight group Grindrod is upbeat. So strong are minerals and commodity prices now that Royal Bafokeng Platinum paid all its capital expenditure last year out of cash flow. Other miners like African Rainbow Minerals report record earnings.
Of course, we are talking about a war zone here. Many big banks and companies are hurting, knocked hard by Covid and heavy-handed lockdowns. Still, says a banker friend, “the survivors are out of bed and going to the gym”. Fitch, the ratings agency, has just raised its forecast of our economic growth this year to well beyond what even the government has been optimistically expecting.
So what’s happening? Partly, growth in China and an almost $2-trillion (R29.5trillion) stimulus package from new President Joe Biden in the US have energising effects on economies everywhere. But those order books the construction companies are talking about are domestic. Ramaphosa’s long-promised infrastructure projects may finally be getting at least to tender stage.
And on Thursday, minerals
& energy minister Gwede
Mantashe came through for
Ramaphosa big time, announcing the winners of
20-year contracts for nearly
2,000MW of emergency energy by next August, injecting investments worth some R45bn into the economy. Some of the winning bids look decidedly odd, but South Africans will be glad of any relief from power cuts. Mantashe also announced that a request for proposals for 2,600MW of wind and solar power would be released on Friday morning and close in August, and that requests for proposals on a further 2,600MW of renewable energy, 3,000MW from gas and 2,000MW from coal and battery power would be released in the coming 12 months.
That’s a lot. On the same day, the Gauteng government unveiled a R23bn roads and transport book which, if implemented, will provide exactly the kind of long-term programme construction companies need, and if Ramaphosa, even with a global wind behind him, can guide this economy into less choppy waters he will be much safer politically.
He still faces a tough political year. He will probably survive a midterm national general conference of the ANC, however, despite prowling opponents. And he may well escape legal action brought by the EFF to force him to reveal who funded his bid for leadership of the ANC in 2017. But a poor showing in local government elections later in the year would hurt him should he seek re-election at the December 2022 ANC elective conference.
He also badly needs to get on top of the pandemic. A third wave anywhere near as bad socially and economically as the second wave could cripple him if it runs away. He must surely be considering shutting the country down again over Easter, if the large churches allow it. I’m guessing, of course, but I’m also not making any plans. Given the utter mess the government has made of vaccine procurement, it is basically back where it was just a year ago and if he is to avoid a devastating third wave of death and overcrowded hospitals, he will have to act precipitously.
Largely, though, the public is giving Ramaphosa an easy ride. With a third wave coming, and plans to literally give away a million doses of one of the most widely used vaccines in the world, there’s barely a squeak from civil society. The media are quieted. Doctors shrug.
Zweli Mkhize and Barry Schoub rule the roost and, based on the most limited and hasty research, they don’t want the AstraZeneca vaccine in any South African arms.
It is a crying shame. This is a successful a vaccine that could keep many vulnerable people safe. For Ramaphosa, though, everything is a political calculation and right now the economic upside is looking good. But I would quietly restock the bar if I were a drinking man. A return to level 3 Easter lockdown for a few weeks would happen without warning.
Economic news is suddenly good. There’s a positive new investment mood